Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — EMPLOYMENT

Employment and Training Opportunities (Women)

Mrs. Renée Short: asked the Secretary of State for Employment what measures he intends to take to extend employment and training opportunities for women.

The Under-Secretary of State for Employment (Mr. Jim Lester): I am informed by the Manpower Services Commission that the MSC's training opportunities scheme will continue to provide a wide range of courses for all of which women are eligible equally with men. In addition the commission is currently sponsoring a number of training and research initiatives specifically designed to encourage the training and employment of women in fields in which comparatively few have hitherto been employed. These are at present on only a small scale but it is hoped they will be capable of wider application. A working party set up by the MSC has recently produced a report about ways in which its special programmes might be developed to meet the needs of women and girls, and the MSC will be following this up.

Mrs. Short: I thank the Minister for the last part of his answer. It is good news that the Government are taking on board the need to train women in new skills. However, is the Minister aware that a serious situation is developing where large numbers of women with jobs in service industries and in the public service—who are generally badly paid anyway—are losing work opportunities?
The cuts in the resources of the Manpower Services Commission are bound to reduce the training opportunities available to men and women. The fact that large numbers of poorer families rely on the wages of the mother to keep the family's head above water highlights the problem. Will the Minister see that adequate resources are made available to deal specifically with the issue of women's unemployment?

Mr. Lester: It is clear from my answer that the Government are conscious of the fact that women need to be trained for a wider range of opportunities than they have been in the past. It might please the hon. Lady to know that placings for women far exceed those for men, as do registrations on the register.

Mr. Stanbrook: In view of the present high level of unemployment would it not be right to give preference to breadwinners—

Mrs. Short: Women often are breadwinners.

Mr. Stanbrook: Would it not be better to give preference to breadwinners rather than to women as a class? May I ask my hon. Friend to bear in mind the necessity for breadwinners to be employed, rather than that opportunities are given to married women and mothers to go out to work?

Mr. Lester: I thank my hon. Friend for his question. It is difficult in this day and age to define who is a breadwinner. Clearly, many women are breadwinners in their own right, and for many families two wages are essential to meet their needs.

Mr. George: Does the Minister agree that a precondition for industrial revival is a well-trained work force? How many men and women will fail to be trained because of cuts in skillcentres, cuts in the MSC programme and cuts in the STEP and TOPS programmes? Are not those cuts a disadvantage to women, and certainly to men?

Mr. Lester: If the hon. Member reads the report of last night's debate he will see that most of our changes are designed to increase the effectiveness of training and to direct that training to where it is most necessary. The changes relating


to skillcentres are designed to increase the overall number of places.

Mr. Harold Walker: Why does not the hon. Gentleman come clean with the House and tell us what will be the real impact of the £170 million that has been cut from the training and employment measures provided by the MSC? Why does he not tell the House how severely women will be affected by the cut-back in the TOPS programme, from 99,000 trainees in 1978 to 60,000 next year? Why does he not tell the House what will be the impact on the training of women of the cutting of 20 skillcentres out of the skillcentres network? Is it not time that we had some decent, honest answers on these matters?

Mr. Lester: The right hon. Gentleman knows how many women are trained in skillcentres. I said last night that if 20 skillcentres were closed—and they are not to be closed—there would still be enough places in the remaining centres to accommodate all the trainees. There is a shortage of trainees in every region. That deals with skillcentres.
The right hon. Gentleman assumes, in relation to the TOPS scheme, that the only form of training available is through that scheme. We feel that industry itself should take a much greater share of training, so bringing it closer to the place of work, and we are trying to encourage that.

Industrial Training Boards

Mr. Hooley: asked the Secretary of State for Employment what discussions he has held with the industrial training boards with a view to easing bureaucratic controls over their activities.

The Secretary of State for Employment (Mr. James Prior): I have had discussions with the Manpower Services Commission and with ITB representatives to see whether the degree of control over the pay and other conditions of service of ITB staff could be reduced consistently with the statutory provision. I have recently written to the chairman of the MSC outlining our proposals.

Mr. Hooky: Is the right hon. Gentleman aware that training boards have to deal with three separate bodies, namely, the training services division, the Department of Employment and the Civil Ser-

vice Department? Is not the system rather cumbersome? Will he reconsider the rather similar statement that he made before Christmas about training board waste?

Mr. Prior: No, I do not want to reconsider what I said before Christmas. There are economics that may be made and should be made. I know that the way in which the boards have to seek permission before they can increase the salaries of individuals is an unsatisfactory statutory provision from the point of view of the management of ITBs. I am keen to put that right, and I believe that I have taken a good step in that direction. In the long run we should consider whether the ITBs should be responsible to industry, and perhaps be paid for by industry.

Mr. Thompson: Does my right hon. Friend agree that the best thing to do with industrial training boards is to scrap them?

Mr. Prior: No, I do not agree. Some boards are doing extremely good work. It is right for us to wait for the report on the ITB system and on training generally. The report has been commissioned by the Manpower Services Commission, and it will be available in July. I hope that it will enable the House and the Government to make far-reaching decisions on how we are to train our people for the last 20 years of the century, which is a matter of supreme importance.

Young Persons (Rural Areas)

Mr. Hicks: asked the Secretary of State for Employment whether he has any specific proposals to assist unemployed young people living in rural areas to obtain training opportunities; and if he will make a statement.

Mr. Jim Lester: I am informed by the Manpower Services Commission that every effort is made to provide a full range of training opportunities for unemployed young people in rural areas under the youth opportunities programme. As my hon. Friend knows, I recently visited the South-West and I was impressed by the quality of youth opportunities programme provision which I saw there.

Mr. Hicks: Does my hon. Friend realise that in rural areas transport to training centres may present genuine


problems? Thus, the work experience and short-term employment schemes have been most valuable and should be retained. Will my hon. Friend be more experimental in his approach and consider the possibility of introducing mobile training centres in conjunction with existing school and similar facilities?

Mr. Lester: I thank my hon. Friend for his supplementary question. We shall always be prepared to consider suggestions for the better use of available resources. I accept that transport is always a difficulty in rural areas. My hon. Friend will know that the Manpower Services Commission has a flex-able range of methods to try to deal with difficulties, which vary from area to area, including the provision of minibuses and residential courses. Any suggestions for improving the service will be considered by the Government.

Mr. Donald Stewart: Is the Minister aware that the removal of transfer of employment grants creates especial difficulties in areas such as the one represented by the hon. Member for Bodmin (Mr. Hicks) and in my constituency, where the provision of minibuses does not solve the problems? Difficulties arise when it is necessary to move entirely out of one's area to find employment.

Mr. Lester: I shall consider the right hon. Gentleman's question and reply in due course.

Mr. Strang: Notwithstanding any statistics that the hon. Gentleman has quoted this afternoon or last night, does he accept that the cuts in the skillcentre programme that he has announced will disadvantage many young people who live in rural areas? Bearing in mind the Government acceptance of the continuing rise in unemployment, is not this the most lunatic cut of all?

Mr. Lester: As the hon. Gentleman knows, no decision has yet been made on the closure of skillcentres. Consideration will be given to that on 28 January by the Manpower Services Commission. The hon. Gentleman will also know that the basic design is to improve placings and to do away with the centres that are costing and not serving. The finished scheme will lead to an improvement in training and placing, and in more people passing through the skillcentre network.

Mr. Myles: Will my hon. Friend consider the employment potential of farms? Every farm could usefully employ at least one extra man if profitability were present.

Mr. Lester: Of course we shall consider employment prospects on farms. However, agriculture has been demanning over a considerable period. We hope that farms will provide a worthwhile form of employment for the younger generation that is coming along.

Mr. Wigley: In view of the increased cost of travel in rural areas, and the danger of rural bus services disappearing completely, will the hon. Gentleman be especially sympathetic to the maintenance of courses at skillcentres and technical colleges for training young people in rural areas? If skillcentres are closed and technical college courses stopped, it will be almost impossible in many areas for young people to travel outside their catchment areas to attend technical colleges.

Mr. Lester: We have considerable sympathy with those who have to experience the problems of travel in rural areas. However, grants are available to those attending skillcentres to help to overcome the problems.

Unemployment Levels

Mr. Winnick: asked the Secretary of State for Employment what changes he expects in the level of unemployment in 1980.

Mr. Dormand: asked the Secretary of State for Employment what changes he expects in the level of unemployment within the next 12 months.

Mr. Prior: The figures published by my Department today regrettably confirm an upward trend in the level of unemployment. There is no short-term answer to this problem. Our success in reducing the level of unemployment will depend on the ability of our industry to respond to changes in consumer demand at a time of rapid innovation and keen price competition.

Mr. Winnick: In view of the latest deplorable figures, is it not time that the right hon. Gentleman stood up to the monetarist fanatics in the Cabinet, whose policies can so easily ensure that we return to the mass unemployment misery and deprivation of pre-war years?

Mr. Prior: The figures for January 1979 were no lower than those for January 1980. The hon. Gentleman will have to consider that, but that does not alter the fact that we all have a responsibility to do everything possible to avoid high unemployment.

Mr. Dormand: Will the right hon. Gentleman attempt an assessment of the period required to reduce unemployment to an acceptable level? Does he recall that when the Labour Government were in office none of the reasons advanced at that time for the level of unemployment was acceptable to those who are now on the Government Benches, especially the Prime Minister? What is so different about the measures that the Government propose to reduce unemployment to an acceptable level, especially in view of today's figures and the fact that unemplayment has soared since the election of May 1979?

Mr. Prior: I presume from the hon. Gentleman's remarks that he accepts that the measures taken by the Labour Government were not successful. The number of unemployed more than doubled during his Government's term of office. One of the problems that we face is that we start this world recession with a far higher level of unemployment than that in any other previous recession. If we produce goods at the right price, of the right quality and at the right time, we shall be able to stop importing other people's unemployment.

Mr. Forman: As the economy is projected to decline over the next year or so, is it not a fact that unemployment is bound to rise unless trade unions manage to display more responsibility and realism in their collective bargaining and a more constructive attitude towards technological innovation?

Mr. Prior: I think that unemployment is bound to increase. The more that managements and unions can hold wages to reasonable levels, the more chance we have of coming through the recession without severe damage. I appeal to both sides of industry to co-operate to achieve that.

Mr. James Hamilton: There is agreement that we are facing a world problem, but will the right hon. Gentleman concede that the Government's policies—for

example, the projected cuts in public expenditure—will aggravate the problem? Will he reconsider the decision to implement the cuts, in the interests of the unemployed and local authorities?

Mr. Prior: There is a world problem, and it will be a serious one for all advanced countries. After the IMF cuts were imposed by the Labour Government in 1976, unemployment started to decline. The prerequisite for reducing unemployment is a better balance between Government and private expenditure, which is now out of hand. That has resulted in higher interest rates. Indeed, higher interest rates are probably the most damaging factor in trying to create employment.

Mr. Cyril Smith: Does the Secretary of State agree that employment is a means to an end, rather than an end in itself? If that is so, is it not time that the Government started talking about full productivity rather than full employment'? When that has been achieved, ought we not to say that the labour force available is too large to work 40 hours a week until a man is 65 and a woman is 60? Ought we not to do something about reducing the size of the available labour force or the hours that it is required to work?

Mr. Prior: Once productivity is right and we are producing more efficiently, it will be correct to start talking in terms of a shorter working life and, perhaps, a shorter working week. The trouble with the British—and I am not saying this in a derogatory sense; it applies to everyone in the House—is that we are ambitious for the things that we wish to do, without actually getting the work done first.

Mr. Bulmer: Is my right hon. Friend in a position to make any estimate of the number of jobs that will be lost this year, or beyond, as a consequence of the pay norms of the previous Administration being substantially exceeded last winter?

Mr. Prior: Undoubtedly, the high level of earnings last winter has been a contributory factor in the rate of inflation this year. It is the high rate of inflation that is so damaging to employment prospects.

Mr. Varley: Will the right lion. Gentleman tell us how many jobs he has saved and how many jobs he has helped to


create in the nine months that he has been Secretary of State for Employment?

Mr. Prior: No, Sir. Nor would I, as a Minister, be so conceited as to believe that that lay entirely within my power.

Mr. Varley: Is it not a fact that the right hon. Gentleman has scrapped the Labour Government's job help schemes? Is it not true also that he has dismantled some of the training programmes? Is it not time that the right hon. Gentleman started using his minority voice against some of the mad monetarist policies of his colleagues in the Cabinet?

Mr. Prior: ; My reply to the great cry against monetarism is that when I speak to people outside the House I find that they believe that the sort of monetarist policies that we are following are not unlike those followed by the previous Labour Administration.

Standing Commission on Pay Comparability

Mr. Bruce-Gardyne: asked the Secretary of State for Employment if he will make a statement on the future work of the Clegg commission.

Mr. Prior: The Standing Commission on Pay Comparability has a number of outstanding references, and the Government are continuing to keep the commission's work under review.

Mr. Bruce-Gardyne: My right hon. Friend has told the House that we all have an obligation to reduce unemployment where we can. Will he make a start by sending this ageing Marxist back to Warwick university to muddle the heads of students there? Surely the commission exists, was appointed, and can exist, for but one purpose, which is to add to unemployment and to inflation. Therefore, will he please terminate it as soon as possible?

Mr. Prior: I do not agree with my hon. Friend's remarks about Professor Clegg. We are keeping the commission under review. It has a number of unfinished tasks to perform, and the time to decide its future will be when it has completed them.

Mr. Race: Does the Secretary of State agree that the evidence that the Government gave recently to the Clegg com-

mission has placed the commission in an entirely new situation in that they have said that the commission ought not to take account of historical comparisons in determining levels of pay, and that the going rate for the pay round in question, or the economy in general, is no longer to be regarded by the commission as a proper method of determining levels of pay for the groups of workers being considered by it?
Will the right hon. Gentleman give the House an assurance that the instruction from the Government to the commission will be reviewed at an early date?

Mr. Prior: The Government have been right to give evidence to the commission. The hon. Gentleman's question bears out the difficulties of comparability exercises. If we are not careful we shall merely enter the circularity of comparing one set of figures with another set of figures created by the same people. We should be careful about the evidence given and the views expressed to the commission.

Mr. David Price: As there is no entirely scientific measure of what any differential should be, does my right hon. Friend agree that even under conditions of free collective bargaining it is useful to have some machinery, such as the Clegg commission, available when it is agreed by the parties to refer to it?

Mr. Prior: I do not think that there is any unanimity on the matter. It would be better, in a pragmatic way, to say that we had better see how we proceed.

Special Temporary Employment Programme

Mr. Tilley: asked the Secretary of State for Employment if he will make a statement on the future of the special temporary employment programme.

Mr. Jim Lester: The special temporary employment programme is subject to annual review. The Government's proposals for 1980–81 will be announced before the end of the present financial year.

Mr. Tilley: Is the Minister aware that in the special temporary employment programme the enterprise workshop scheme is the only part of that programme that can involve the creation of permanent jobs in viable enterprises


or workers' co-operatives? Is he further aware that the Manpower Services Commission has decided that it wishes to scrap that part of the programme, for what I can only describe as bureaucratic reasons? In view of the support not only in the country but on both sides of the House for the enterprise workshop programme, will the hon. Gentleman use his power or influence with the MSC to ensure that that programme is not only saved, but expanded?

Mr. Lester: We have considered the matter carefully. The sad fact is that the enterprise workships—in spite of the good will held for them—have not performed well. Most of them have not proved their viability within two years. It is for that reason that the MSC has considered the whole programme. It feels that it is not the right agency to handle the scheme when we have already the Co-operative Development Agency, the Small Firms Advisory Service, the Industrial and Commercial Finance Corporation and COSIRA, which are much closer to the form of enterprise workshop that we should all like to see succeed.

Mr. Needham: Will my hon. Friend assure the House that because the STEP programme works in the special assisted areas and helps the long-term unemployed, the Government will continue to support it as actively as possible?

Mr. Lester: I ask my hon. Friend to await the outcome of the review. I am pleased to be able to tell him that, following the changes that have been made, we are reaching 70 per cent. of the target group, which is the long-term unemployed, and that is more than the 40 per cent. achieved by the previous Labour Administration.

Mr. Woolmer: Does the Minister recognise that it is important to make an announcement on the future of such programmes well before the beginning of the financial year? Is he aware that the temporary employment subsidy scheme, which is extremely important and affects textile areas, is due to end in March of this year? The textile and clothing workers are anxious that an announcement should be made within the next few days to continue the scheme.

Mr. Lester: I recognise that any period of waiting is always difficult. I assure the hon. Gentleman that the timetable is no different from that of the previous Administration. As soon as we can make an announcement, we shall.

Industrial Harmony

Mr. Adley: asked the Secretary of State for Employment what further steps he intends to take to promote industrial harmony.

The Under-Secretary of State for Employment (Mr. Mayhew): We shall continue to encourage management and unions to develop better communications and greater employee involvement within industry. We shall ensure through our Employment Bill that there is a fairly balanced framework of law within which these improvements can be achieved.

Mr. Adley: Does not greater employee involvement imply that employees would have the right to be consulted over matters that affect their livelihood? Does not my hon. and learned Friend think that in any democracy all employees should have the unfettered right to be consulted in a secret ballot on matters such as whether they should come out on strike? Will he see whether the steel workers in the private sector can be given that right at the earliest opportunity?

Mr. Mayhew: Secret ballots for important union decisions and elections are highly desirable and, indeed, are widely desired. As my hon. Friend knows, the Employment Bill makes provision for public funds to be made available to pay for that. I cannot hold out any prospect of an advanced implementation of that provision in the Bill.

Mr. Barry Jones: Are not the Government deliberately setting a course for 2 million unemployed? Does not that carry with it the risk of grave social consequences? Do not the Minister and his right hon. Friend despair of the inflexible and aggressive policies of the Prime Minister and the Secretary of State for Industry? Is not the steel industry a case in point?

Mr. Mayhew: The Government are not setting the deliberate course that has been


suggested, nor do we accept the description of the policies that have been mentioned. Therefore, the rest of the question does not call for an answer.

Mr. Emery: With regard to industrial harmony, can my hon. and learned Friend quantify the harm that is being done to industry by secondary picketing in the steel strike? What action does he intend to take?

Mr. Mayhew: As everyone knows, there has been widespread secondary picketing during the course of this damaging strike. One has only to look at reports on television and in the press to see how effective a weapon secondary picketing is. That underlines the importance of the provision in the Employment Bill to restrict privileged picketing to the place at which the picket works.

Mr. Gwilym Roberts: Does not the hon. and learned Gentleman accept that Government policies in general are creating industrial disharmony and creating a divisive society by making the very rich richer through massive tax handouts and the great mass of the population much poorer?

Mr. Mayhew: The taxation reforms, especially those in regard to income tax, were substantially voted for by those who work on the shop floors of industry.

Northern Region

Dr. David Clark: asked the Secretary of State for Employment what further plans he has to increase employment in the Northern region.

Mr. Jim Lester: By concentrating regional assistance more sharply on areas of greatest need, such as the industrialised parts of the Northern region, the Government aim to encourage firms to invest there. This will both create new jobs to replace those that are being lost in the region's traditional industries and will expand still further the region's industrial base.

Dr. Clark: Has the Minister seen the figures published today, which show that for every 100 men and women in the Northern region unemployed last month, 107 are unemployed this month? Can he explain how public expenditure cuts in a constituency such as mine will affect local employers, who employ

the vast majority of people in the area? Can he also explain how the great betrayal of the siting of INMOS in a non-development area will help anyone?

Mr. Lester: The question about INMOS is one for the Department of Industry. We regret the increase in unemployment as much as the hon. Gentleman does. As to the reduction in public expenditure, I must point out that in January 344,000 people were being helped by the special measures, as opposed to 255,000 a year ago.

Sir William Elliott: Before my hon. Friend considers the difference in employment in the Northern region this month as against last month, will he bear in mind that unemployment in the Northern region was exactly doubled in the four years during which the Labour Party was in office?

Mr. Lester: I thank my hon. Friend for his intervention. I am very conscious of that fact. What we must do during our period of office is create new jobs and reduce unemployment. The policies that we are applying, which will provide a better balance between public and private expenditure and create an expansion of real jobs, thus providing goods and services that people need, are the only real hope for the Northern region.

Mr. Bagier: Did not the hon. Gentleman learn anything from yesterday's debate? Does he not recall being told that such things as the very high minimum lending rate stop small businesses from expanding? Does he not appreciate that all the measures which the Government are applying as so-called "shock medicine" provide no cushion at all for areas such as the North-East? Does he not appreciate that the Government's policies are driving the Northern region into a position where ordinary working people will rebel against what is happening to them?

Mr. Lester: I visit the Northern region, and intend to do so frequently, and I have seen no signs of rebellion. The minimum lending rate has been brought about because of the debt that we inherited from the previous Administration.

Mr. John Grant: In view of the serious unemployment figures announced today, does the Minister accept that the Northern


region and other regions could be better helped by better use of EEC money? In that regard, has he seen reports that Commissioner Vredeling said in Strasbourg that the British Government have not approached the Commission for available EEC funds to deal with steel industry redundancies, and, far worse than that, that the Government have rejected £70 million that was specifically earmarked for that purpose? If that is so, is not that wanton irresponsibility on the part of the Government? Why have we not had a statement to the House explaining the situation?

Mr. Lester: My information is that those facts are not correct, but I shall be happy to check them. I am assured that my Department makes ample use of EEC funds and that it makes every possible claim that is available to it on the European social fund.

Disabled Persons

Mr. Sheerman: asked the Secretary of State for Employment if he will make a further statement about the Government's intentions regarding the quota system for employing disabled people.

Mr. Prior: The Manpower Services Commission is currently reviewing the quota scheme and will be making recommendations to Ministers later this year. In the meantime, I am encouraged by the interest shown in the "Fit for Work" campaign. I recognise that the employment prospects of disabled people is a matter of great concern to this House, and this concern I fully share.

Mr. Sheerman: Is the right hon. Gentleman aware that, with growing unemployment, this category of person is even more affected than the ordinary worker who has all his faculties? If the 3 per cent. quota scheme is not working in its present form, we urge the Government to introduce a viable alternative quickly.

Mr. Prior: As I have said, we are awaiting the review of the quota system which the MSC is carrying out. The real problem is that many disabled people do not register and are taken into employment. That sometimes gives the impression that the 3 per cent. figure is not working, whereas we believe that on the whole it is. This is a serious problem, and it will undoubtedly become more serious if unemployment rises.

Mr. Hannam: Does my right hon. Friend accept that one of the reasons why the present quota system is not working is that the 3 per cent. target is set too high? Will he consider reducing it to 2 per cent. and strictly enforcing it to ensure that all employers contribute to the employment of disabled people?

Mr. Prior: I think that we must wait for the report. I suspect that the House will then wish to debate the matter. We must recognise that the quota is now probably not the best or most satisfactory way of ensuring that the disabled are employed.

Mr. Ashley: Although it is true that many disabled people do not register, will the right hon. Gentleman bear in mind that this is the worst possible time to drop legal safeguards for disabled workers, because the rate of unemployment is very high? The quota system should be implemented and strengthened by the imposition of a levy on those bad employers who never have responded, and never will respond, to the "Fit for Work" campaign.

Mr. Prior: I shall, of course, bear in mind what the right hon. Gentleman said. I recognise that there are a number of bad employers in this respect. However, many other good employers employ well over the 3 per cent. figure, although not all those employed are necessarily disabled people. Therefore, I think that we must wait for the review.

Mrs. Knight: Is my right hon. Friend aware that the Government have cut contracts for some of the items produced in workshops for the disabled, notably the Birmingham workshop for the blind? This is having a serious effect on work for the disabled in the area. Will he look into the matter?

Mr. Prior: If my hon. Friend will send me details of that case, I shall, of course, have it looked into.

Mr. John Grant: Will the right hon. Gentleman acknowledge that the previous Government introduced a number of measures to try to maintain and improve the position of disabled people seeking employment? We assure him that if he continues those measures, or improves upon them, he will have the support of the Opposition. However, I also assure him that he will incur our bitter resentment if


changes to the quota system, which we recognise needs review, which are nothing other than a cover for further public expenditure cuts at the expense of disabled people.

Mr. Prior: With regard to the last point, I am seeking to protect the disabled in every way I can from any cuts in public expenditure. I may not be able to do so entirely, and I if I cannot I shall tell the House where I am not able to do so. As to the hon. Gentleman's other point, the House has always adopted a bi-partisan approach to problems of disablement, and I hope that we can continue that.

North-West Region

Mr. John Evans: asked the Secretary of State for Employment if he will make a statement on employment prospects in the North-West region of England.

Mr. Jim Lester: Future levels of employment depend upon a number of factors which we cannot predict with any degree of certainty. The Government's policies, however, are aimed at creating the economic conditions in which employers will be encouraged to invest in industrial and commercial enterprise thereby creating new jobs. The success of our policy depends upon the cooperation of both sides of industry, and not least upon the matching of pay increases with higher productivity.

Mr. Evans: Is it is not time that the Minister stopped giving rubbish answers such as that to the House? Is not the real answer that employment prospects in the North-West are the same as those in every other region which has had its regional assistance slashed by this Right-wing, monetarist Government? Are not the employment prospects in the North-West appalling?

Mr. Lester: The hon. Gentleman knows that suggestions for changes in regional aid have yet to take place, so they can hardly be seen to have had any effect yet. Clearly the policies of the previous Government were no help to the North-West region. As the hon. Gentleman knows, unemployment increased by 106 per cent. in the North-West region.
The hon. Gentleman talks about "rubbish answers". Surely it is time that

we got down to addressing ourselves to the question seriously instead of trading figures every Question Time. The serious answer is that the future of the North-West depends upon the future of the British economy. The regions do well when the British economy does well. Until we get the British economy right all the measures that we take in the regions can help only marginally.

Mrs. Kellett-Bowman: In view of the serious situation facing the textile industry and its effect on employment in the North-West, will my hon. Friend consider urging his ministerial colleagues to press Signor Giolitti, the Regional Commissioner for the regional fund in the European Parliament, to include textiles in the second tranche of the non-quota section of the regional fund, which he is now considering and which Ministers will then have to sanction?

Mr. Lester: I am delighted to take my hon. Friend's advice.

Mr. Marks: Is the Minister aware that if we are to get back to full employment one of the investments that will be needed will be in the training of skilled workers? Why is the Minister preventing that by cutting down on the training of apprentices and the retraining of people changing their jobs in the North-West?

Mr. Lester: The number entering apprenticeship training has not changed. The hon. Gentleman referred to skill-centres. The problem in the North-West is that there are far more places at skill-centres than there are people to fill them.

Trade Union Immunities

Mr. David Price asked: the Secretary of State for Employment, in view of the House of Lords' judgment in Express Newspapers Limited versus McShane and Another, whether he intends to bring forward any additional proposals for the law on blacking.

Mr. Les Huckfield: asked the Secretary of State for Employment whether he will make a statement on his proposed response to the judgment in Express Newspapers Limited versus McShane on trade union immunities.

Mr. Mayhew: The judgment has interpreted the Labour Government's legislation in a way which, when in opposition,


my right hon. Friend foresaw and warned against.
We are considering what changes are needed to protect from secondary blacking and other forms of secondary action employers and employees who may be far removed from the dispute, and we shall shortly be consulting.

Mr. Price: In view of my hon. and learned Friend's reply and the fact that the House of Lords rejected the Court of Appeal's concept of remoteness in connection with blacking, will he take advantage of the Employment Bill now before Parliament to introduce a suitable amendment to ensure that there is some limit on how far from the point of dispute blacking can be carried?

Mr. Mayhew: It is clear that there is a need to restrict the now very wide interpretation of immunity that derives from the recent judgment. The route to that objective which my hon. Friend has suggested—I know that he takes great interest in these matters—is one of the routes that we are considering.

Mr. Huckfield: As the test of what constitutes action in the furtherance of a trade dispute was clearly intended to be subjective in the Trade Disputes Act 1906, the Act of 1976 and in the recent House of Lords' judgment, why cannot the Minister leave it as it is?

Mr. Mayhew: There is more than one means by which it is open to the Government, in the interests of employees as well as employers who may be remote from the origination of the dispute, to restrict that immunity. We are looking at all available routes and will be consulting shortly.

Mr. Budgen: Does my hon. and learned Friend agree that the main reason for the effectiveness of secondary action is that few men who come from a closed shop are prepared to break blacking or cross a picket line when they know that by so doing they risk losing their job? Does he also agree that until the Government are prepared to bite on the bullet and say that the closed shop will be illegal no effective action will be taken against any form of secondary picketing or blacking?

Mr. Mayhew: My hon. Friend is right to point to the significance of the closed

shop in the effectiveness of secondary picketing. However, I do not agree that it would be practical or wise to make the closed shop illegal. There is great significance in the proposal contained in the Employment Bill, which will give the right of appeal to an independent tribunal to anybody who considers that he has been unreasonably expelled from his union because of a closed shop.

Oral Answers to Questions — PRIME MINISTER (ENGAGEMENTS)

Mr. Straw: asked the Prime Minister if she will list her official engagements for 22 January.

The Prime Minister (Mrs. Margaret Thatcher): In addition to duties in the House, I shall be having meetings with ministerial colleagues and others.

Mr. Straw: Does the Prime Minister agree with her Chief Secretary to the Treasury that prescription charges at 70p may not be high enough and that there may be a case for hospital charges? Will the right hon. Lady say whether the Government are seeking cuts of £2 billion from next April? Will she also say whether the Chief Secretary's promise of three years of unparalleled austerity means that there is now no prospect of any rise in living standards until at least 1983?

The Prime Minister: I saw my right hon. Friend's remarks at the weekend. The hon. Gentleman has addressed a number of remarks to me and I am not certain which ones to take. To answer all of them would take me the rest of Question Time. Of course we are seeking further reductions in expenditure during 1980–81, for the reason which the hon. Gentleman knows. Already we are borrowing far too much to meet existing expenditure. It is the level and amount of that borrowing that are causing the very high rate of interest that we want to reduce. Therefore, we are looking for reductions in expenditure in many places and many Departments. The £2 billion would, of course, include substantial reductions in the European budget.

Mr. Archie Hamilton: Will my right hon. Friend please find time today to give thought to President Carter's proposals for holding the Olympic Games anywhere


other than Moscow and put forward proposals that they should be held on sites partly or wholly in this country?

The Prime Minister: I shall be replying to the letter which President Carter sent to me indicating the action that he is taking with regard to the United States Olympic Committee. I shall later today be writing to our own Olympic Committee to ask it to seek an alternative site, through the International Committee, and to offer to hold certain events in this country.

Mr. James Callaghan: My hon. Friend the Member for Blackburn (Mr. Straw) asked a specific question about the Health Service. The Chief Secretary was quite specific and said that the Government were considering increasing charges on prescriptions as well as introducing charges for visits to doctors and hospital beds. Will the right hon. Lady give me an assurance that, whatever consideration is being undertaken, no such decision will be taken?

The Prime Minister: The right hon. Gentleman knows full well that I cannot undertake to spell out any reductions in public expenditure before they are made. We must seek reductions in that expenditure, and the right hon. Gentleman can be sure that our pledge that we shall keep up expenditure on the National Health Service, as we gave it in the election, will be maintained.

Mr. Callaghan: The right hon. Lady refers to a pledge given in the election, which was to keep up Health Service expenditure. She also said on 18 April, at Beeston, that it was clear that there were
no plans to make people pay to visit their doctor, no plans to introduce hotel charges for those in hospital.
Will the right hon. Lady repeat that pledge now?

The Prime Minister: With regard to those two specific things, let me correct the right hon. Gentleman because I happen to hold very strong views on certain things such as charges for staying in hospital and for visits to doctors. I gave specific pledges during the election about those. Those charges will not be introduced.

Mr. Callaghan: In that case, will the right hon. Lady send a copy of what she

said at Beeston to the Chief Secretary at the Treasury so as to avoid him getting into any more trouble when he answers questions at meetings?

The Prime Minister: I hope that the right hon. Gentleman will not need to consult the Financial Timesor any other paper about what has been said. I gave my views during the election and I stand by them.

Mr. Bruce-Gardyne: Reverting to the question posed by my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton), will my right hon. Friend find time today to look at the activities of the Export Credits Guarantee Department? Is she aware that this para-statal body is busy, happy as a sandfly, promoting credits paid for by the British taxpayer for the provision of feed grain to Poland which can go straight through to the Soviet Union and circumvent the ban which President Carter has wisely imposed on feed grain sales to the Soviet Union? Does not this matter need urgent attention?

The Prime Minister: As my hon. Friend knows, we wish to support President Carter in the stand that he has taken on measures with regard to Soviet action in Afghanistan. If what my hon. Friend said is true, I shall get my right hon. Friend the Secretary of State for Trade to look into this matter.

Mr. Parry: asked the Prime Minister if she will list her public engagements for Tuesday 22 January.

The Prime Minister: I refer the hon. Member to the reply which I have just given.

Mr. Parry: Will the Prime Minister find time this afternoon to talk to her righthon. Friend the Secretary of State for Energy following the recent announcement of outrageous and unjustified increases in gas charges? This follows recent price increases for rail, electricity, mortgages and postal services. Will she answer the beleaguered housewives and householders on these many problems?

The Prime Minister: I believe that the hon. Gentleman knows the reason for the decision on gas prices. Much of the gas that we are using at present comes from the old southern basin of the North Sea


and the Gas Board is purchasing that gas at prices ranging from 1½p to 3p a therm. That is now having to be replaced by gas from much further north from later fields and that is costing 14p a therm. Unless we adjust the price, we shall go on using up cheap gas at a very fast rate and have very little left.

Mr. David Steel: Will the Prime Minister register her protest with the Soviet Government at the arrest of Mr. Sakharov earlier today?

The Prime Minister: We heard the news on the radio. We have no further information than that. The Government take a very serious view of this matter, and we shall most certainly register our view.

Mr. Bulmer: Will my right hon. Friend find time today to consider the plight of those who are called out on strike against their will, without consultation, and even in breach of agreement, to see whether they should be given protection beyond that already foreshadowed in the Employment Bill?

The Prime Minister: There is provision in the Employment Bill for a voluntary postal ballot. We hope that those who feel that they should be consulted will take advantage of that postal ballot and that enough of them will demand it. If we get that measure through, it will be a very good start.

Mrs. Dunwoody: Will the right hen. Lady find time today to re-read her own programme at the election and explain how she will convince families that she actually has their interests at heart if she freezes child benefits and removes heating from homes?

The Prime Minister: I have already given a reply on gas prices. If we use up the cheap gas and encourage using increasing amounts of it, there will be none left.
Child benefits are for the Budget. As the hon. Lady knows, it is all too easy, and it is frequently done by Opposition Members, to make increasing demands which others have to meet.

Mr. Marlow: Will my right hon. Friend have time today to consider that our enemies' enemies are our friends and that, if anybody in Afghanistan or anyone

else under the jackboot of Soviet imperialism wishes us or our allies to give them weapons, arms, training or support to fight off the Russian bear, we should consider his request?

The Prime Minister: I think that we may be very well aware that many people under the Soviet yoke wish that they had been able to defend their countries as well as we intend to defend this country.

Mr. Bidwell: asked the Prime Minister if she will list her official engagements for 22 January.

The Prime Minister: I refer the hon. Member to the reply which I gave earlier.

Mr. Bidwell: Is the right hon. Lady aware that the members of the Ecumenical Industrial Mission in the North believe that the steel workers should receive a bigger pay rise than they have been offered? Last Sunday they were calling for prayers, presumably on the side of the workers. The right hon. Lady is rapidly losing the support of the people. If she loses the support of God, she will be in serious difficulty.

The Prime Minister: I saw representatives of the steel unions and of the British Steel Corporation. I did not think that they were asking me for prayers.

Mr. Churchill: Is my right hon. Friend aware that she has strong support in all quarters of this House and, indeed, outside this House, for the measures that she proposes for the Olympics this year? Will the Government be prepared to bear their share of the financial burden of removing the Moscow Olympics to some alternative site?

The Prime Minister: We have offered to make available some of the sites that we have in this country for some events.

Mr. James Lamond: Was the right hon. Lady dismayed when she saw the increased unemployment figures? What has happened to the boom that we were told to expect when small businesses expanded and took on one additional man each? Are they as disappointed with her as she is with them?

The Prime Minister: The hon. Gentleman asked whether I am dismayed about unemployment. Of course I am worried


when the unemployment figures rise. But at least the hon. Gentleman will agree that I have constantly warned that, if people want so much in wages that they bargain themselves out of jobs, unemployment will rise. The only way steadily to increase employment is to produce goods and services that other people want and are prepared to pay for. As the import figures show, there is no shortage of demand in this country.

Mr. Best: Has my right hon. Friend had an opportunity of considering the recent document published by the CBI entitled "Jobs Facing the Future" which states that by 1976 output per worker in the manufacturing sphere in France, Germany and Belgium was 50 per cent. higher than in this country and that even in Italy it was 20 per cent. higher than it was in this country? Will she continue to make that point when people in this country press for higher wage claims?

The Prime Minister: I believe that both sides in the steel dispute accept that there is plenty of scope for higher productivity. I have sent both sides back to negotiate together because only those concerned in this industry can sort out the problems within the financial constraints of the £450 million.

Mr. Varley: On the basis that the gas industry's profits are to rise to between £800 million and £1,000 million and that the right hon. Lady believes in the ability to pay, how high does she expect gas workers' wages to go over the next 12 months?

The Prime Minister: I trust that the gas workers will be reasonable in their demands, and I trust that the right hon.

Gentleman might even support us in hoping and expecting that they will be reasonable.

Mr. McCrindle: Has the Prime Minister been impressed by the seeming difference of opinion between the leaders of the trade unions and the trade unionists themselves about the provisions of the Employment Bill now before the House? In the light of the seeming support that the Government have on secondary picketing, the closed shop and the like from ordinary trade unionists, will the Government feel fortified in pursuing this essentially moderate measure?

The Prime Minister: I saw the survey, to which I believe my hon. Friend refers, yesterday. I agree that the vast majority of people, including the vast majority of trade unionists, are wholly behind us in the Employment Bill presented by my right hon. Friend the Secretary of State. We shall press forward with it as fast as we can.

Mr. Gordon Wilson: Will the Prime Minister look at the unemployment figures for Scotland, and take note that the Scottish economy seems to be in deeper recession than that of the United Kingdom as a whole? Is it her ambition, failing action to reduce unemployment, to quadruple figures which her Labour predecessors doubled?

The Prime Minister: The hon. Gentleman knows that the only way to obtain genuine jobs with a future is to produce goods and services that people will buy. People are buying imported goods and services. There is no shortage of demand. There is a shortage of supply. It is our economic objective to secure an increase in supply through jobs.

STEEL INDUSTRY

Mr. John Silkin: (by private notice)asked the Secretary of State for Industry whether he will make a statement on the results of the discussions the Government have had with the trade unions and the chairman of the BSC.

The Secretary of State for Industry (Sir Keith Joseph): The Secretary of State for Employment and I met Mr. Sirs and Mr. Smith on Saturday. Together with the Secretary of State for Employment and myself, the Prime Minister saw trade union leaders and the BSC management at separate meetings yesterday.
The Government welcomed the meetings, which allowed those concerned to explain their views to Ministers. All concerned clearly understood that Ministers were in no way involving themselves in negotiation—and Ministers emphasised that there was no taxpayers' money available to fund a settlement. ACAS continues its contacts to see whether it can help.

Mr. Silkin: The Opposition have consistently over the past fortnight pressed Ministers to meet the unions and the British Steel Corporation. Therefore, obviously we welcome those meetings.
I should like to ask the Secretary of State some questions. First, does he still stick to his rigid and inflexible timetable? Secondly, if he is still rigid on that timetable and on the finance available, what on earth can ACAS do? What flexibility does it have to bring the two sides together? In the light of that, how and when does the Secretary of State expect a settlement to be reached? While there is no settlement, the strike is prolonged. Has he any estimate of the cost and the effect on British industry of a prolonged steel strike? Finally, will he take note that we expect him to give regular reports to the House as the steel strike progresses?

Sir K. Joseph: The answer to the right hon. Gentleman's first question is "Yes". [Interruption.] I cannot remember whether the right hon. Gentleman asked me whether I was sticking to what he called a rigid timetable. If that was the question, the answer is "Yes". The

Government believe that it is in the interests of the steel workers, the taxpayers and the whole country.
It is not for me or for my right hon. Friend the Secretary of State for Employment to speak for ACAS. ACAS is an independent body. I have no way of telling the House when a settlement will be reached. The cost to British industry of a prolonged strike could be very serious. It will also be very serious for Britain if, after the taxpayer has found about £4,500 million to help the BSC to become competitive, the BSC's management and workers fail to reach a settlement that enables the workers to earn more by higher productivity and the British steel industry to become competitive again.

Mr. Silkin: The right hon. Gentleman has not told the House what is the point of an ACAS meeting, if ACAS has no room for manoeuvre.

Sir K. Joseph: I told the House that neither I nor any Minister can speak for ACAS. It is not for me to justify a decision of ACAS. As an independent body it makes its own decisions. I understand that it has been in contact with both the BSC management and the steel unions.

Mr. John H. Osborn: Is my right hon. Friend aware that there are many steel workers in the private sector who fear the impact of a closed shop, and are worried that they will be forced to strike? What contact has the Secretary of State had with the British Independent Steel Producers Association about the possibility of the private sector being brought into the strike?

Sir K. Joseph: My hon. Friend will be aware that the House will have seen the statement issued by the British Independent Steel Producers Association yesterday. The association explained the serious damage—possibly terminal damage—to individual firms that would be caused if the strike spreads to the private sector.

Mr. Coleman: Will the Secretary of State instruct the BSC to reallocate the funds that are available from the Government? Does he not believe that the purpose of allocating this money should be to provide for the health of the industry, not its redundancy? Does not he agree


that the rigidity of the BSC, in its insistence in allocating this money, is the means of keeping the dispute going?

Sir K. Joseph: The answer to the hon. Gentleman's question is "No, Sir". It is not in the interests of the steel workers, the steel industry, the taxpayers, or the country to make taxpayers' money available for pay increases in the steel industry. The taxpayer has been asked to provide by the Government, on top of the £4,000 million already provided, an additional £450 million next year to help towards investment, working capital and closure redundancy costs. That is fair to the taxpayer, because it was the decision of previous Governments of both parties that led to an expansion of the industry, which has proved to be overoptimistic. It is therefore reasonable that the industry should be helped by the taxpayer to contract in a humane way. That justifies the contribution towards closure redundancy costs. However, it is not reasonable to ask the already heavily burdened taxpayer to meet increases in earnings that the steel workers can find by higher productivity on the way to becoming, as is in their interests, competitive.

Mr. Michael Brown: Can my right hon. Friend say, now that he has had an opportunity to consult both management and unions, how far apart are the two sides?

Sir K. Joseph: It was not that sort of meeting. We were not in any way negotiating with either management or unions. It is not so much the amount of money that is at issue between the parties. What is at issue is from where the extra earnings are to come. Are they to come from the taxpayer, which is the unions' view, or are they to come, as the Government believe is proper, from the higher earnings and increased competitiveness of the steel workers?

Mr. Roy Hughes: Will the Secretary of State note the advice of Mr. Scholey, of the British Steel Corporation, that the Government should not interfere in the dispute? Bearing in mind that Mr. Scholey has presided over losses of over £1,000 million in the past three years, would it not be a good idea for the Secretary of State to take the advice of the

Wales TUC and appoint a caretaker management to organise the BSC?

Sir K. Joseph: The British Steel Corporation management has inherited a difficult task. I do not think that a caretaker management is a good idea.

Mr. Speaker: Order. Although this is an extension of Question Time, I propose to call two more speakers from either side.

Mr. Hal Miller: Will my right hon. Friend tell the House whether there was any discussion with the steel workers' leaders about the effects of picketing factories not concerned in the steel dispute, and on the effects of picketing the imports of steel that would enable factories to continue their production in this country? Will he tell us what answer, if any, was given by the steel leaders?

Sir K. Joseph: I do not think that that subject came up in the presentation by the steel union leaders. They chose the subjects that they wanted to discuss with us and they put their point of view.

Mr. Cyril Smith: If the Secretary of State is seeking, in his own words, a humane way in which the British steel industry can contract itself, why is it more humane to the workers in the British steel industry that they should have to break even by 1980 whereas steel industries in other parts of Europe do not have to break even until 1981?
Secondly, will he tell us what part the Secretary of State for Employment is playing in all this? Is it a new way of conducting industrial relations in this country, when the Secretary of State for Industry is more involved than the Secretary of State for Employment in dealing with strikes of this magnitude?

Sir K. Joseph: I think that I am involved because I am accountable to the House for the nationalised British steel industry. The hon. Gentleman's assumption, with which he introduced his question, is totally wrong. Half the German steel industry is already back in profit, and the whole Dutch steel industry is back in profit.

Mr. Patrick McNair-Wilson: Given that the damage that would be done by an extension of the strike into the private sector would be as my right hon. Friend


suggested, did he, in his discussions with Mr. Sirs or at any of the other meetings, suggest that a ballot of the work force should take place before the weekend and before this damaging strike takes place?

Sir K. Joseph: No, Sir. Decisions on the question whether to have a ballot are for the union leaders and members and for the managements concerned.

Mr. Flannery: Did the Secretary of State notice that yesterday, after Mr. Bill Sirs had had the discussions, he went straight up to the great rally in Sheffield—one of the greatest rallies of steel workers ever seen? Did the right hon. Gentleman notice the tremendous solidarity of all the trade union movement in the city, to demand 20 per cent.? Does he further understand that the steel workers say that they are determined to have it and that they will not back down until they get it?

Sir K. Joseph: I read that Mr. Sirs had gone to Sheffield yesterday.

BARKING (EXPOLOSIONS)

Miss Richardson: (by private notice)asked the Secretary of State for Employment whether he is aware of the explosions which occurred on Thames View Estate, Barking, last night, causing the evacuation of the whole estate, and whether he will make a statement.

The Under-Secretary of State for Employment (Mr. Patrick Mayhew): At about 8.20 pm yesterday, a fire was reported at Womersley Boome Chemicals Ltd., River Road, Barking. The company, which employs about 15 persons, stores, breaks down from bulk and distributes a range of chemicals. There were included on the premises last night about 2 tons of sodium chlorate and lesser amounts of sodium cyanide and potassium cyanide, as well as varying quantities of flammable liquids and other chemicals.
The fire brigade arrived at approximately 8.30 pm, and while it was fighting the fire two small explosions occurred, after which the firemen withdrew to assess the situation.
There then followed a larger explosion in an area where the sodium chlorate was stored. This explosion caused severe structural damage to the single storey building. No damage was caused to any buildings outside the factory perimeter.
The chief scientific officer of the chemical incident unit of the London Fire Brigade, believing that there was a risk of poisonous fumes from the involvement of other chemicals, advised that there should be an evacuation of the population for at least 1 mile downwind, as a result of which some 6,000 persons were evacuated.
There is no present evidence that poisonous gas clouds resulted from the involvement of the chemicals, although large quantities of dark smoke were given off from the combustion of the plastic packaging. In the event, we have had no reports of injuries to members of the public. I understand that several members of the fire brigade, unfortunately, received minor injuries as a result of the explosions.
A factory inspector paid routine visits to the premises in February and March of last year, and, although nothing of serious concern was noted, the firm was given


advice about the storage of highly flammable liquids and on the segregation of chemicals.
Factory inspectors began their investigation late last night, and this is continuing. Preliminary indications so far are that the fire began in the locker room. As soon as the investigation by the Health and Safety Executive has been completed, the findings and any recommendations will be made public.

Miss Richardson: I hope that you will allow me, Mr. Speaker, to pay tribute to the London borough of Barking and to the police, who carried out a most fantastic evacuation operation last night—it is no mean task to move 6,000 people—and to voluntary workers and council workers who turned up, unasked, to help with tea, food and so on. I think that they should be thanked, as well as the London Fire Brigade. We are very sorry that some firemen were injured. I should particularly like to thank my constituents for the fortitude and humour with which they withstood this almost war-time experience. When I was there at 7·30 this morning, they were either back at work or on their way to work.
The fact that my constituents bore this incident with such fortitude does not mean that they will forget it very easily. They were seriously alarmed, and remain seriously alarmed. They feel, as I do, that there should be a public inquiry into the way in which the incident started.
Furthermore, since the Health and Safety Executive has as its remit the duty of looking at the siting of factories that store or manufacture noxious materials, should it not be reminded that far too many factories are sited in places that are much too near to heavily populated residential areas? We ought to be looking at planning policy on this basis. I hope that the Minister will deal with this aspect when he replies.

Mr. Mayhew: All concerned will be most grateful for the very well deserved tributes to the fire brigade, to the police and to the voluntary workers who carried out the evacuation, apparently with the greatest efficiency, and also the hon. Lady's constituents. I do not doubt that they will be gratified by the tribute that she has paid to them for their bearing.
With regard to having a public inquiry into how the fire started, I have told the House that the Health and Safety Executive has already embarked upon an inquiry into just that question, and that its findings and any recommendations that are made as a result of it will be made public. I think that at the moment, at any rate, that is the right course to adopt.
I have asked when the factory was put up and when it was brought into this use. I understand that it was put up in 1934, and that the housing estates in its neighbourhood were put up at some time after the war.
Questions of proximity of dangerous undertakings to houses are very much within the remit of the Health and Safety Commission. No doubt it will be one of the matters to which it will have regard when carrying out the investigation that I have mentioned.

Sir Bernard Braine: Is my hon. and learned Friend not aware that this serious incident has implications for all communities who have to live alongside hazardous industry using and storing dangerous and toxic material? Does he appreciate that however efficiently evacuation was carried out at Barking, where it took nearly three hours to evacuate 6,000 residents, in a place such as Canvey, an island with limited access to the mainland, where a much more serious incident might be expected, the position would be impossible? My people have to live alongside the greatest concentration of risk in the country. Is my hon. and learned Friend aware that there are still serious gaps in the regulations governing hazardous industry?
Is it not high time that Parliament had the opportunity to discuss this matter of importance to so many constituencies?

Mr. Mayhew: My hon. Friend has had discussions with my right hon. Friend and with myself on the issues that he raises with such dedication for Canvey Island, in his constituency. I do not think that we can say as yet that last night's incident has any new implication for Canvey Island, but we must wait and see what emerges. As my hon. Friend knows, those who advise him about his constituency interest are in the course of further consultations with those who have technically advised my right hon. Friend The Secretary of State. We must wait to


see the results that emerge from that. I do not accept that there are proven gaps in the relevant regulations. As my hon. Friend knows, the Health and Safety Executive carried out a two-year inquiry into Canvey Island and it reported in 1978.

Mr. Arthur Lewis: I endorse the words of my hon. Friend the Member for Barking (Miss Richardson) and point out that the whole of East London is riddled with such factories. Is the Minister aware that I have made representations to his Ministry with no success concerning the conveyance of irradiated nuclear fuels through that area? We were told by his experts that such things could not happen. However, if tanks of dangerous nuclear fuels were affected, could he be sure that the whole of East London would not suffer? Will the Minister arrange to take the fuel away and send it to the Home Secretary's constituency? He does not want it; he stopped it going through there. The Minister should stop fuel going through the East End of London because one day there will be an accident and the Minister will be held responsible.

Mr. Mayhew: The hon. Gentleman knows that any Government must be advised by the Health and Safety Commission that was set up by Parliament with all-party support for this very purpose. Such matters are better left to the expert advice that is available to the commission and to the inquiries and deliberations that it carries out.

Mr. McCrindle: Did the weather conditions, and particularly the high winds, have any effect on the distribution of the potentially dangerous cloud of gas?

Mr. Mayhew: As I have indicated, there was no evidence of any cloud of poisoned gas. There was a great deal of black smoke, which was carried downwind in an easterly direction.

Mr. Spearing: As there are many similar works adjacent to housing areas throughout East London, including many in Newham, does the Minister accept that this incident focuses attention on fire precautions inside those works? Will he tell us whether the works affected came within the terms of reference of the advisory committee on major hazards which is part of the Health and Safety Commission and which reported recently?

If the works do not fall within those terms, will he consider the implications of that?

Mr. Mayhew: Obviously, all hon. Members with constituency interests arising from the presence of potentially dangerous installations will be alerted by such an incident. Apparently, only considerable amounts of black smoke were given off, but the incident highlights the importance of fire prevention regulations. I shall look into the issue raised by the hon. Gentleman.

Mr. Well beloved: Does the Minister accept that such a serious incident will greatly increase the apprehension felt in Thameside constituencies such as that of Erith and Crayford? Will he arrange for the Health and Safety Commission to carry out an urgent review of chemical plants now operating in the Erith and Crayford area, as they have been a source of concern to the authorities and especially to local residents who live close to those plants?

Mr. Mayhew: Much more would need to be known about the causes of last night's incident to warrant special action by the Health and Safety Commission concerning installations in the hon. Gentleman's constituency. He must wait and see what emerges from the investigation. At the moment, the Government have no indication that any special connotations arise for Thameside areas from last night's accident.

Mr. Speaker: Although this is an extension of Question Time, I propose to call the two hon. Members who have been standing and the Front Bench to conclude.

Mr. Alton: Although my colleagues and I add our sympathies and tributes to those already expressed by the hon. Member for Barking (Miss Richardson), I must ask the Minister whether the fire brigade was aware before last night's incident that the chemicals stored on the site were prone to react violently when treated with water.

Mr. Mayhew: The nature of the chemicals that are customarily stored there was known to the factory inspectorate. I do not know whether their nature was immediately known by the fire brigade, but I shall make inquiries.

Mr. McNally: The Minister has told us to wait and see. There was a similar large fire in central Stockport. Surely the geographic significance of these incidents is of such concern to individual Members that we cannot continue to wait and see until there is a major disaster. Will he assure us that he will personally look into the questions of the safety of industrial chemicals and oils in central urban areas? Will he make a positive statement to the House that will rectify the situation?

Mr. Mayhew: The hon. Gentleman knows that there are regulations relating to the storage of flammable liquids. He has also heard that the premises involved were inspected during a routine inspection by a factory inspector in February and March last year. There is no evidence that further regulations are needed, but that question will be looked at again in the light of the inquiry's findings.

Mr. John Grant: I associate the Opposition with the tributes paid by my hon. Friend the Member for Barking (Miss Richardson) to the police and public. We particularly regret the injuries sustained by the firemen. The Minister stated that factory inspectors have visited the works twice recently. Can he tell us whether their advice was accepted and what checks were made to ensure that it was? As the Under-Secretary of State for Employment, it may be difficult for the hon. and learned Gentleman to answer, but can he confirm that there were reports of looting? If looting took place, it would be particularly deplorable.

Mr. Mayhew: There was a relatively minor matter relating to the labelling of certain containers and advice was given about the distance from the perimeter fence at which chemicals should be stored. I am not aware whether that was checked and subsequently monitored.
I have read the report about looting referred to by the hon. Gentleman, but I have no knowledge of it and it does not fall within the responsibilities of my Department. I was glad to see a disclaimer was subsequently issued in a later edition of the evening newspaper that suggested that it was an isolated incident.

BUSINESS OF THE HOUSE

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): With permission, Mr. Speaker, I wish to inform the House that my right hon. and learned Friend the Chancellor of the Exchequer now proposes to open his Budget on Wednesday 26 March 1980 and not on Tuesday 25 March, as previously announced. I am sure that this change will be welcomed by all hon. Members.

Mr. Foot: We welcome this minor U-turn and look forward much more eagerly to some major U-turns.

Mr. St. John-Stevas: I accept that remark in the spirit in which I imagine it was offered. I am pleased to have been able to make this ecumenical announcement. It gives me particular pleasure to reconcile Canterbury and Westminster.

Mr. Michael Morris: Will my right hon. Friend explain why the statement was made on the national news with reactions from the archbishop? Will he confirm that in future the parties concerned will be able to confer about the details before dates are fixed for major national events?

Mr. St. John-Stevas: I have no responsibility for speculation by the national media, only for statements made in the House. With regard to dates, my right hon. and learned Friend the Chancellor of the Exchequer was well aware of the clash of dates but he had to reconcile them as best he could. My right hon. and learned Friend makes no claim to infallibility in these matters. It is a sign of strength rather than of weakness for a Minister to respond constructively to reasonable objections.

Mr. David Steel: Surely the Leader of the House and not the Chancellor of the Exchequer is responsible for the business of the House. However, may I thank the right hon. Gentleman for responding far more graciously and sensibly today than he did to my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), who raised the matter last Thursday? May I also tell the right hon. Gentleman that some of us had already made our dispositions elsewhere for that day?

Mr. St. John-Stevas: By tradition, the responsibility for deciding the date for the Budget rests with the Chancellor of the Exchequer and not with myself. I am grateful for the tribute to my graciousness but was not aware that I was ungracious to the hon. Member for Berwick-upon-Tweed (Mr. Beith). I pay tribute to his perspicacity. He was the only hon. Member, apart from the Chancellor and myself, who seemed to be aware of the clash.

Mr. Speaker: Order. If questions are brief, I shall call those hon. Members who wish to speak.

Mr. Peter Bottomley: Will my right hon. Friend pass on the thanks of the House and the country to his right hon. and learned Friend for agreeing to change the date of the Budget? Further, will he recognise that the restrained suggestions from those involved in the Church and politics, or both, have led to a change that a more ribald response earlier might not have achieved?

Mr. St. John-Stevas: I am delighted that my hon. Friend seems to be satisfied. I shall pass on his tribute to the other Chancellor.

Mr. Mark Hughes: Will the Leader of the House pass on to his right hon. and learned Friend the jingle that pertained to 26 March when, prior to 1582, it was the New Year's day—"Saints and sinners go their way, even dogs they have their day"?

Mr. St. John-Stevas: I am grateful for that help. I shall not respond on behalf of the sinners or the dogs, but the saints all rejoice.

Mr. English: Since the right hon. Gentleman belongs to a Government who call themselves Conservative, will he

suggest to the Treasury that it reverts to the traditional Tuesday, which would not have caused the trouble?

Mr. St. John-Stevas: It was decided for a Tuesday debate, which is the traditional day, but it has been moved to a Wednesday for the convenience of hon. Members and in response to the declarations of the leaders of our national Church—our national Church south of the border. I do not want to get out of one frying pan into another fire.
It is a happy outcome, and I congratulate my right hon. and learned Friend on his happy and constructive response.

Mr. Speaker: Order. Yes, but not across the border.

Mr. Hooley: Now that the Chancellor has made a nod from Mammon to God, will he pay a bit more attention to God's children, particularly the old, the poor and the sick, who have so far had a pretty raw deal from his Administration?

Mr. St. John-Stevas: That matter does not appear to arise out of the statement. I cannot anticipate my right hon. and teamed Friend's Budget.

STATUTORY INSTRUMENTS, &c.

Mr. Speaker: By leave of the House, I shall put together the two questions on the motions relating to statutory instruments.

Ordered,
That the draft INMARSAT (Immunities and Privileges) Order 1980 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Water Authorities and National Water Council (Limit for Borrowing) Order 1980 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. St. John-Stevas.]

SHERIFF OFFICERS AND WARRANT SALES (SCOTLAND)

Mr. Dennis Canavan: I beg to move,
That leave be given to bring in a Bill to control the conduct of sheriff officers and to put an embargo on the use of warrant sales in Scotland.
The practice of warrant sales in Scotland dates back to the Middle Ages. Since then, several attempts have been made to reform the law, the most recent being a successful attempt by my right hon. Friend the Member for Rutherglen (Mr. MacKenzie) in 1973, when he introduced a Private Member's Bill to ban warrant sales of certain essential furniture, such as bedding and heating and cooking appliances.
The object of my Bill is to extend the embargo, with the hope eventually of a permanent ban on this antiquated, degrading, expensive and not very effective system of debt enforcement in Scotland.
It causes a great deal of harassment, worry and distress, particularly to families on low incomes, although it is not confined to them. Failed business people have been driven to suicide through the despair caused by the system.
The case that I shall briefly outline is perhaps not quite so tragic, but it helps underline how ludicrous and incredible the system is. A council house tenant in my constituency called in Stirling district council to get rid of a wasps' nest in her house. Many local authorities perform that task free of charge, and I would point out that this constituent is a single parent with four children, living on a low income. However, the Tory-controlled Stirling district council imposed a charge of £2·50 for the service. At first my constituent thought that there had been a mistake, but the local authority went ahead with court action. The sheriff officers were called in. They went along to my constituent's house and, without her permission, entered her house and proceeded to evaluate her property as a possible subject of a warrant of sale.
By that time the debt, including court and sheriff officers' expenses, was over £30. The sheriff officer valued her carpet, vacuum cleaner and television set at £37, although it cost my constituent more

than £350 to buy those items and would cost her that to replace them.
When I took the matter up with the district council, even the council expressed concern at the antiquated process of debt recovery and agreed that the law on diligence leaves much to be desired. I also took the matter up with the Lord Advocate. He stated:
Enforcement of debt by poinding of goods (sometimes the only mode of diligance open to a creditor) is relatively expensive because the diligence is necessarily labour-intensive and, in the case of debts of small amount, the expenses can be, or appear to be, disproportionate to the amount of the original debt.
It appears that in some cases the system is not even in the interests of the creditor, because as time goes on the debt tends to accumulate. It increases, and therefore the possibility of the debt being repaid decreases.
In many ways the system appears to be legal intimidation. The sheriff officers, without permission from the householder, can enter the house and threaten to sell the furniture at a mere fraction of its value. There is no legal obligation on the courts or the sheriff officer to take account of the financial circumstances of the debtor and the desirability of paying the debt by instalments. It is up to the creditor to choose the method of repayment, once the court has issued its decree.
If the debtor does not pay, the sheriff officer can threaten to advertise the warrant sale. Daily or weekly, certain Scottish newspapers are filled with pathetic lists of names and addresses of people who are subjected to that system. It is a public humiliation and punishment instead of a constructive attempt to get the debt repaid.
In 1971, the Scottish Law Commission set up a working party to investigate warrant sales and the law of diligence, but it was disbanded in 1977 with no report or recommendations published. The Commission claims that it has taken over some of the functions of the working party, but it, too, has failed to publish findings or a report on possible alternatives.
For the best part of a decade, the legal establishment in Scotland has been dragging its feet on that issue. I strongly suspect that the reason for the delay can be found in the vested interests of the legal mafia. The working party comprised lawyers, sheriff officers and a sheriff clerk,


which is hardly a cross-section of Scottish society. There are also connections between certain firms of lawyers, firms of sheriff officers, private debt collecting agencies and certain unscrupulous secondhand dealers and auctioneers.
Not so long ago The Sunday Times highlighted the case of a Mr. Thomas Gray, a sheriff officer and messenger-at-arms to the High Court. The article stated:
Over the past 20 years Thos. Gray and his partner, James Donald, have built up a network of 11 firms of sheriff officers.
One of those firms with an office in Stirling is the one that was involved in the case of my constituent. Later on the article said:
Gray also owns or is associated with seven firms in the private business of debt collecting.
In other words, the system is unlike the English bailiff system. In Scotland the sheriff officer is not employed by the court but operates more or less as a private enterprise and therefore has a vested interest. These people make a living out of other people's misfortunes, such as falling into debt. It is not all that surprising to read in the article that two out of the eight members of the Law Commission's working party were James Donald, Thomas Gray's partner, and John Gray, his brother and secretary to most of his companies.
My Bill proposes to separate the functions of sheriff officer from those of private debt-collecting agencies. Sheriff officers will become employees of the court, and therefore will be subject to more control. Their behaviour will also be subject to a code of conduct. Allegations have been made of high-handed bullying and threatening tactics being used by sheriff officers, not always in cases of warrant sales, either.
There was a case last year of a sheriff officer being responsible for dragging three young children screaming from their beds at 4.30 in the morning in order to execute a child custody order. Such Gestapo tactics should be outlawed in any civilised society.
As for warrant sales, my Bill proposes to ban them completely, at least until such times as the Law Commission comes up with alternative proposals. I should like briefly to indicate a possible alternative system. Most small debts are not even disputed by the debtor and there is no need to go to the court in order to determine the legality of the debt. Instead of the present system of debt enforcement, it would be better to have a debt arbitration service, which would enable the creditor and the debtor to come to some arrangement about the repayment of the debt, taking account of the debtor's financial and family circumstances. That does not happen under the present system. The arbitrator could be given the power to issue a repayment order. payable, if necessary, at source from the wages or other income of the debtor.
I maintain that this system would be far more in the interests of both creditor and debtor. It would be less brutal, more civilised, and probably more effective. Therefore, I ask the House to support my efforts to ban warrant sales, which are a barbaric, inhuman and medieval relic, causing undue hardship and misery to many unfortunate people and their families.

Question put and agreed to.

Bill ordered to be brought in by Mr. Dennis Canavan, Mr. Gregor MacKenzie, Mr. James Dempsey, Mr. William McKelvey, Mr. Ernie Ross, Mr. Allen Adams, Mr David Marshall, Mr. Norman Hogg, Mr John Home Robertson, Mr. George Foulkes, Mr. Ron Brown and Mr James White.

SHERIFF OFFICERS AND WARRANT SALES (SCOTLAND)

Mr. Dennis Canavan accordingly presented a Bill to control the conduct of sheriff officers and to put an embargo on the use of warrant sales in Scotland: And the same was read the First time; and ordered to be read a Second time upon Friday 15 February and to be printed [Bill 125.]

Orders of the Day — COMPETITION BILL

As amended (in the Standing Committee), considered.

Mr. John Smith: On a point of order, Mr. Speaker. On the grouping of your provisional selection of amendments there is one minor matter that I suggest you might consider. There is a large group of amendments starting with new clause 3 and including amendments Nos. 33, 34 and 46. My proposal is that amendment No. 23 be taken together with that group. It seems to us to fit more easily into that debate and it would probably be for the convenience of the House as well as result in shortening our proceedings.

Mr. Speaker: It appears from the various looks that I am getting that that is acceptable to the House.

New Clause 1

DISCLOSURE OF REPORTS ON MONOPOLY REFERENCES TO PERSONS NAMED

'In section 83 of the Fair Trading Act 1973 (laying before Parliament of reports under that Act)—

(a) at the beginning of subsection (1) there shall be inserted the words "Subject to subsection (1A) below"; and
(b) after subsection (1) there shall be inserted the following subsection:—

"(1A) The Minister or Ministers to whom a report of the Commission on a monopoly reference is made shall not lay a copy of the report before either House of Parliament unless at least twenty-four hours before doing so he transmits or they transmit to every person named in the report as a person in whose favour a monopoly situation exists a copy of the report in the form in which it is laid (or by virtue of subsection (2) below is treated as being laid) before each House of Parliament.".'.—[Mrs. Sally Oppenheim.]

Brought up, and read the First time.

The Ministry for Consumer Affairs (Mrs. Sally Oppenheim): I beg to move, That the clause be read a Second time.

Mr. Deupty Speaker (Mr. Bernard Weatherill): with this we may take Government amendments Nos. 38 and 39.

Mrs. Oppenheim: This new clause arises out of an assurance given to my hon. Friends the Members for Romford (Mr. Neubert) and for Loughborough (Mr. Darrell) in Committee and also as a result of strong representations made to us that it is unreasonable to publish reports about firms without giving them sufficient advance notice of the contents of the reports to enable them to reply to inquiries from the press. Therefore, we bring forward these limited amendments requiring that a report be disclosed 24 hours before publication. The amendments apply to all reports of the Monopolies and Mergers Commission under the Bill and also to monopoly reports under the Fair Trading Act where similar considerations apply.
There is no provision relating to the Director General's preliminary reports, but he has assured me personally that he will follow the same procedure. There is no need to write this into the Bill because the Director General's reports are not laid before Parliament and there would be no question of discourtesy to Parliament in prior disclosure.

Mr. Michael Neubert: I thank my right hon. Friend. On behalf of the Government, she has met the point of principle that was raised in Committee. Her action will be widely welcomed in industry. There was an inadvertent element of injustice in the proposals as drafted, and the new clause meets the case that was made. I express my gratitude on behalf of other hon. Members concerned and myself.

Questions put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 2

ORDERS AND REGULATIONS

'.—(1) Any power of the Secretary of State to make orders or regulations under this Act shall be exercisable by statutory instrument.
(2) An order under section2(3) above shall be laid before Parliament and shall cease to have effect (but without prejudice to the making of a new statutory instrument) unless, within forty days of the making of the order, it is approved by a resolution of each House of Parliament; and in reckoning any period of forty days for the purposes of this subsection, no account shall be taken of any period during which Parliament is dissolved or prorogued or


during which both Houses are adjourned for more than four days.
(3) Any statutory instrument containing regulations under this Act or an order under section 10 or 12(1) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(4) No order shall be made under section 20(1) above unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.'.—[Mrs. Sally Oppenheim.]

Brought up, and read the First time.

Mrs. Sally Oppenheim: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 2, 7, 11, 12, 16, 17, 19, 41 and 47.

Mrs. Oppenheim: Again, we promised in Committee to consider whether orders creating exemptions from the anti-competitive practice provisions in the Bill should be subject to the affirmative, rather than the negative, parliamentary procedure. Subsection (2) of the new clause will give effect to this modification.
As indicated in Committee, we are reluctant to provide for orders being laid before Parliament in draft form and approved before they can be brought into operation. This could lead to serious delays when Parliament is in recess. Therefore, the clause allows orders to be brought into effect before approval is obtained but requires approval within 40 days if the orders are to remain in force.
We have also taken the opportunity in these amendments to bring together all the provisions governing the procedure for orders under the Bill into a single clause. These amendments make no difference to the substance of the Bill but shorten and simplify it.
Hon. Members will recall, as the hon. Member for Norwood (Mr. Fraser) did in Committee, that in Opposition I often pressed for more parliamentary accountability in the case of orders such as this. I hope that he will feel that I am consistent in giving way to the points that he made. Therefore, I am inserting this procedure in the Bill.

Mr. Neubert: Once again, I am indebted to my right hon. Friend for the prompt and effective way in which she has met these points. I am sure her action will be appreciated by all those

who uphold the responsibility of this House in ensuring that if any important decision comes before it there should be an opportunity for full debate. This is far preferable to the automatic procedure involved in the original Bill.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 8

ORDERS FOLLOWING REPORT UNDER SECTION 11

(1) This section applies where a report of the Commission on a reference under section 11 above concludes that the body specified in the reference is pursuing a course of conduct which operates against the public interest.
(2) If it appears to the Secretary of State that any other Minister has functions directly relating to the body specified in the reference or, in the case of a reference only concerning the activities of the body in a part of the United Kingdom, functions directly relating to the body in respect of its activities in that part, he shall send a copy of the report of the Commission on the reference to that Minister; and in subsection (3) below "the relevant Minister" means—
(a) in a case where it appears to the Secretary of State that any Minister (including himself) has such functions, that Minister, and
(b) in a case where it appears to the Secretary of State that no Minister has such functions, the Secretary of State.
(3) If—
(a) the relevant Minister considers it appropriate for the purpose of remedying or preventing what he considers are the adverse effects of the course of conduct specified in the report of the Commission as operating against the public interest, and
(b) the body specified in the reference does not fall within paragraph (d) of section 11(3) above and is not a subsidiary of such a body,
he may by order direct the body to prepare within such time, if any, as may be specified in the order a plan for remedying or preventing such of those effects as are so specified; but where there is more than one relevant Minister no such order shall be made except by all the relevant Ministers acting jointly and where none of the relevant Ministers is the Secretary of State no such order shall be made except after consultation with him.
(4) It shall be the duty of a body to which a direction is given under subsection (3) above to prepare such a plan as is mentioned in that subsection and to send a copy of that plan to the Minister or Ministers by whom the order containing the direction was made who shall lay it before Parliament; and, in a case where the plan involves the use by the body of its powers in relation to any


subsidiary within the meaning of the Companies Act 1948, the plan shall specify the manner in which the body proposes using those powers.
(5) Whether or not an order has been or may he made under subsection(3) above, the Secretary of State may if he considers it appropriate for the purpose of remedying or preventing what he considers are the adverse effects of the course of conduct specified in the report of the Commission as operating against the public interest, by order exercise one or more of the powers specified in Part I, excluding paragraph 10, of Schedule 8 to the Fair Trading Act 1973, to such extent and in such manner as he considers appropriate.
(6) ((In the Fair Trading Act 1973—
(a) section 90 (general provisions as to orders under section 56 etc.) except subsections 2) and (3),
(b) section 91(2) (publication of proposals to make an order),
(c) section 93 (enforcement of certain orders), and
(d) Part I (except paragraph 10) of Schedule 8 (powers exercisable by orders under section 56 etc.),
shall have effect as if any reference in those provisions to an order under section 56 of that Act included a reference to an order under subsection (5) above.—[Mr. Tebbit.]

Brought up, and read the First time.

Mr. Deputy Speaker: It will be convenient to take with this new clause Government amendment No. 52 and the following amendments:

No. 27, clause 12, in page 17, line 30, leave out 'excluding paragraph 10'.

No. 28, in page 17, line 32, at end, insert—
'Provided that the exercise of powers specified in paragraph 10 of Schedule 8 to that Act shall only be exercised jointly by the Secretary of State and the Minister responsible for the body specified in the reference.'

No. 30, in page 18, line 1, leave out 'excluding paragraph 10'.

The Under-Secretary of State for Trade (Mr. Norman Tebbit): I beg to move, That the clause be read a Second time.
I hope that this clause, which is intended to replace the existing clause 12, will be generally welcomed by the House, and, of course, Government amendment No. 52 is consequential upon it to remove the existing clause 12.
During consideration of the Bill in Standing Committee, my right hon. Friend said that she was considering whether it might be desirable and appropriate

to table amendments on Report to provide more effective powers to follow up the findings of the Monopolies and Mergers Commission than were already provided under clause 12. We have come to the conclusion that an additional power is required, and the new clause gives effect to that decision. The new power has been drawn up so as to provide a more appropriate way of acting upon Commission reports dealing with questions of the efficiency of, and the service provided by, nationalised industries and the other bodies included in clause 11. The power will be exercisable by order only where the Commission considers that an investigated body is pursuing a course of conduct operating against the public interest. It will enable a Minister with a sponsoring function for the body in question, after consultation with the Secretary of State for Trade, to direct that body to submit a plan for remedying or preventing the adverse effects which the Minister considers arise from that course of conduct.
Where there is no Minister with direct responsibilities for such a body, the power to require the plan will be exercised by the Secretary of State for Trade. Where more than one Minister has responsibilities for a body, the power will be exercised jointly by them, again after consultation with the Secretary of State.
Once the body has presented its plan, it will have discharged its formal obligations under the terms of the order. However, in putting forward the plan the body concerned will need to take account of the fact that its proposals will be made public and that there will be public interest in ensuring that its proposals are implemented. Implementation of the plan will also be taken into account in Departments' normal discussions with the body about its corporate plans and financial requirements.
The new power is additional to that already contained in the existing clause 12 of the Bill, which enables the Secretary of State to exercise the powers in schedule 8 to the Fair Trading Act, following a finding by the Commission that the body in question is pursuing a course of conduct contrary to the public interest. Such powers may still be appropriate where, for example, a report under clause 11 produces evidence of abuse of a monopoly situation or an anti-competitive practice.


But I would expect the new powers to be more relevant to most references.
As I have said, amendment No. 52 will delete the existing clause 12 and is purely consequential upon this new clause.
Turning, then, to Opposition amendments Nos. 27, 28 and 30, which we are discussing together with new clause 8, I should say that we debated these in Committee, as, indeed, we debated those matters which have caused us to table new clause 8. The Government still believe that it is the underlying causes of high prices which should be tackled rather than the symptoms. In the case of the nationalised industries, a simple power to regulate prices might merely result in the transfer of the higher prices from the consumer to the taxpayer in the form of a higher subsidy to the body concerned or in some other way.
Regulation of a nationalised industry's prices and charges could conflict with the financial objectives set by Ministers and, as the right hon. Member for Lanarkshire, North (Mr. Smith) well knows, the target returns for nationalised industries are one of the prime factors in setting the prices which they charge. In addition, such regulation might introduce an unnecessary and potentially damaging degree of rigidity into the commercial behaviour of nationalised industries. Again, I think that Ministers in the previous Administration would accept that from their own experience.
The investigations for which the order-making powers in clause 12 are intended are primarily efficiency audits, and the Commission's reports will be available to sponsoring Ministers when they come to determine financial targets.
Therefore, we find ourselves probably very much where we found ourselves in Committee so far as these Opposition amendments are concerned, and I would not be able to recommend to the House that they be accepted. On the other hand, I hope that the new clause which we have tabled will be seen by the Opposition as moving a considerable extent in the same direction as they wished to take when we discussed these matters in Committee.

Mr. John Fraser: This new clause contains one novelty and one omission. The omission, of course, is one that is highlighted in the Opposition amendments, in that the Bill remains giving no

power to a Minister to recommend any kind of price reduction, price freeze or price restraint as regards the prices charged by nationalised industries. As we shall have an opportunity in a moment to discuss these matters at greater length, I will not go into any great detail, but the hon. Gentleman will concede that paragraph 10 of schedule 8 to the Fair Trading Act 1973 provides that, following an adverse report from the Monopolies and Mergers Commission, a Minister has powers which he may exercise to restrain prices, and those powers to restrain prices can continue without any limit. Those powers have been exercised from time to time by way of price supervision and price restraint, particularly in the case of Valium and Librium. But when we come to deal with the nationalised industries no such powers are to be included in this Bill, although such powers previously existed under the Price Commission Act and were so exercised.
The hon. Gentleman says that one has to deal with the underlying causes of price inflation. So far as I can recall, in the gas and electricity industries the underlying cause of the impending price inflation rests with the Financial Secretary to the Treasury and the Government Benches. So there can be no question there about the responsibility's being put upon the taxpayer.
However, there may well be areas where the Monopolies and Mergers Commission looks a t the financial structures of a nationalised industry and decides that the way in which tariffs are being worked out or the way in which a price increase is being loaded on one set of consumers as against another is unfair. While as a whole the price structure of a nationalised industry may be fair and the prices charged by the nationalised industry may be not unreasonable, it may well be that the tariff structure or the structure of prices inside the industry is unfair.
A very good example, which was highlighted by the Price Commission in past reports, is the way in which the railways are capable of loading a price increase on a captive group, particularly commuters. It may be that while the total profitability of a nationalised industry may not change, it would be perfectly fair to comment adversely on the way the price increase is loaded on one consumer as against another.
Furthermore, in the past nationalised industries—I am not criticising them particularly on this score—have sometimes got their calculations wrong. It happened in the Post Office over telephone charges, as a result of which a restraint was exercised, and not only that but there was actually a rebate to every telephone user. There have been other occasions when the sums have been got wrong. Even the vagaries of the weather can change the profitability of an industry. So it is wrong that there should be this omission, which does not apply to private industry, of the power to control prices.
My second point concerns the novelty which appears in the clause—a novelty which I welcome. It enables the Government to impose a plan, after consultation, on a nationalised industry where there has been a conclusion that certain practices operate against the public interest. I have no objection to that at all. Why cannot we have the same thing with private industry? Why is there this lack of evenhandedness as between one sector and the other? I can think of occasions in when dealing with monopolies in the past—Tate and Lyle is a good example—where this sort of power would have been welcome.
I will not press the matter any further, but I ask the Government whether, in the context of the further competition Bill which they have promised to bring to the House in the future, they will consider the extension of this power which is to be applied to the nationalised industries to private monopolies as well.

Mr. Tebbit: I thank the hon. Member for Norwood (Mr. Fraser) for his welcome to at least part of the clause. I understand his reservations, and I realise that it is likely that the main debate on inflation and prices will come later in the day.
When I refer to dealing with the underlying causes of inflation, I distinguish between those underlying causes and the fact of price increases. It is easy to get a good laugh by talking about the difference between increases in prices and inflation, but on thinking more deeply about these matters one realises that there is a distinction between the two.
The distinction I mean to draw is in

the sense that it is possible to press a finger or thumb against any specific area of a balloon that is being inflated and to hold in that area, but, inevitably, the inflation of the balloon will continue in some other area. It might carry on uniformly over the whole surface of the balloon and, therefore, not be so readily identified. It might be possible for someone to say "I am stopping the balloon from inflating by pressing my thumb upon it", but that is not the way in which inflation of the balloon should be controlled. The cause of the inflation of the balloon lies in what is being pushed into it, and that will not be controlled by someone presing a thumb on the outside.
That is the approach that the Government are adopting towards inflation and its control, in sharp contrast to the approach adopted at times by the previous Administration. Under the guidance of the International Monetary Fund, the previous Administration acted in the way I am suggesting, even if they did not always talk in that way, but at later stages they slightly shied away from that approach.

Mr. John Smith: I am intrigued by the Minister's notion of counter-inflation policy being seen in terms of a balloon. What has happened over the recent proposals for electricity and gas price increases? Is that not a case of putting some hot air into an already large balloon?

Mr. Tebbit: I am sure that we shall have some hot air later this afternoon, but the right hon. Member for Lanarkshire, North (Mr. Smith) must accept that the extra profits which will be made by the Gas Corporation from the price increase will be made not as a result of an instruction to put up prices directly but as a result of an instruction to make a proper rate of return on its assets. There is a slight difference there to which the clause and the amendments address themselves. Profits made from the price increase will not disappear; they will be available in essence to the Government in the pursuit of other policies, either to tax less or to borrow less, both of which are counter-inflationary policies.
I am sure the right hon. Gentleman will accept that, however much he might like to make the case that the effect of the increase in gas prices will be hurtful


to many people. Of course, we understand that. I think he will see what I mean when I say that to some extent his amendments bear upon this. If we fix a rate of return for a nationalised industry—if financial targets are fixed—there are only two things which can give. There are the efficiency of the industry and the price which it charges for its products.
We are discussing the powers which Parliament should have. It is right that, having fixed a rate of return, we should look at the degree of efficiency or inefficiency of the nationalised corporation concerned in achieving that rate of return. That may show that prices are higher than they would have been had the industry been more efficient. It could also show that prices are higher than they would have been had the rate of return been lower. That is so at any rate in the short run, although it may not be true in the long run. It is not sensible to suggest that we should control both prices and the rate of return and also discuss the efficiency of the corporation. We need two of those factors, and I suggest that the two we need are the rate of return and the efficiency of the industry.

Mr. John Fraser: What will happen when industries move over to current cost accounting? If there is a genuine mistake about the value of an industry's assets and, as a result of that accountancy mistake, it has too high a return on capital and charges too high a price, what will the Government do then?

Mr. Tebbit: The rate of return will be adjusted in subsequent years if that is shown to be so. In some cases the industry would consider that it should lower its prices. That is what a business would do in the normal course under competitive pressure.
The hon. Member for Norwood referred to railway fares. When the Bill is enacted, our proposal is to refer the question of fares and service on commuter lines. I recollect that we discussed that proposal in Committee and we all agreed that it would be an interesting and fruitful inquiry. We look forward to it.
The hon. Gentleman asked why we should not apply these ideas to private industry and ask private companies to produce a plan for dealing with the criticisms which have been made. If private

companies find themselves being closely examined, they will have to react; they will have to produce a plan and they will have to respond, informally if not formally, in the same way as a nationalised industry would respond. But it is not necessary to expect private companies to produce plans which are, in effect, produced for the Government through the medium of the Director General in quite the same way as the nationalised industries do. The nationalised industries are creatures of the House and they receive from the House protection, which private industry does not.
In view of what I have said, I hope that the hon. Gentleman will feel able not to press his amendments. I certainly could not suggest to the House that they should be accepted.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 10

POWER TO MAKE GRANTS TO CERTAIN BODIES

'If the Secretary of State is satisfied that—
(a) the general advice of any body on matters of interest to users of goods and services would be useful to him in the formulation of policy concerning those matters, and
(b) the body disseminates information of such interest,
he may make a grant to the body on such terms as he thinks fit.'—[Mr. Tebbit.]

Brought up, and read the First time.

Mr. Tebbit: I beg to move, That the clause be read a Second time.
The clause deals with an untidy situation which has come to light during the progress of the Bill and is not directly related to the other purposes of the Bill. It is designed to provide clear and specific statutory authority for a number of continuing payments of public money which, until now, have depended solely on the authority of the annual Appropriation Acts. In particular, it will provide much more satisfactory statutory cover for the grants-in-aid to the National Consumer Council and the National Association of Citizens' Advice Bureaux.
Until now, the annual Appropriation Acts appear to have been regarded as sufficient authority for these payments.


The annual grants to NACAB have been dealt with in this way for many years. The National Consumer Council was set up in 1975 by the previous Administration. It is a non-statutory body and no specific statutory provision for funding has been sought until now. No legal impropriety is involved in all this, I hasten to say, and there are, I understand, precedents for such arrangements. It is not, however, a completely satisfactory situation and, given my right hon. Friend's recent announcement of a doubling of the inherited public expenditure provision for NACAB, the Government's determination to continue to support the CAB movement and our view that there is a continuing role for the NCC, it would be inappropriate not to take the opportunity of this piece of legislation to make satisfactory and sufficient provision.
The power in the new clause is designed to allow grants to be made to bodies, first, to which the Secretary of State can look for advice on matters of interest to users of goods and services and, secondly, which disseminate information on such matters. Both the NCC and NACAB fulfil these conditions. The grants are not restricted to any specific purpose and thus the full range of NACAB's activities can properly be funded. Expenditure on grants to the NCC and NACAB next year is expected to total about £4 million. There will also be a small grant of some £7,000 to the National Federation of Consumer Groups which will also fall under this provision.
It is not expected that the new power will give rise to any expenditure above that already agreed and allowed for in the Government's public expenditure programme. In essence, the new clause is to make sure that we are providing for this expenditure to be made with specific statutory authority as opposed to the more general authority that has been used in the past. Since it is a continuing expenditure for this purpose, it is right that it should be dealt with in that way.

Mr. John Fraser: There is no objection to the new clause. Indeed, what the hon. Gentleman has said about support for the National Consumer Council is extremely welcome and, I believe, sensible. There are other bodies apart from the National Federation of Consumer

Groups, the NCC and the Citizens Advice Bureaux. I believe that some grants have been made in the past to a consortium which included mainly the Consumers Association, which also advises Minister on European matters. That advice has been welcome. I am glad to have confirmation from the hon. Gentleman about the continued existence of the National Consumer Council, which is an extremely useful body, not always allying itself with the Government, as we learned in office. However, a body that is not prepared to criticise is not worth its weight.
I am slightly surprised that the new clause was not moved by the right hon. Lady rather than by the Minister responsible for aviation. It is nevertheless welcome.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 3

MODIFICATION OF SECTION 13 TO CONTROL INFLATION

''(1) The Secretary of State may by order make such modifications to section 13 of this Act as appear to him to be appropriate to restrain inflation or to enable any price or charge of interest on money lent or rent or charge for the use of land to be investigated.
(2) An order under this section may contain provisions to restrain, freeze or reduce a price or prices or other money charges mentioned in the preceding subsection.
(3) An order under this section may contain such transitional, incidental or supplementary provisions as the Secretary of State thinks fit.
(4) The power to make an order under this section shall be exercisable by statutory instrument, but no such order shall be made unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.'

Brought up, and read the First time.

Mr. John Smith: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments.

No. 33, in clause 13, page 19, line 3, at end insert,
'and
(c) containing such recommendation for the restraint or reduction in the price specified as the Director considers justified.'.

No. 34, in clause 13, page 19, line 6, at end add—
'(7) Where the Director has made a report to the Secretary of State under subsection (5) above which contains a recommendation under paragraph (c) of that subsection the Secretary of State may by order regulate the price specified in the original direction to such extent and in such circumstances as may be specified in the order but not to an extent greater than the recommendation of the Director.'.

No. 46, in clause 24, page 25, leave out lines 38 to 43.

No. 48, in clause 24, page 26, leave out lines 5 to 9.

No. 49, in schedule 1, page 27, leave out lines 1 to 43.

No. 50, in schedule 2, page 28, leave out lines 1 to 24.

In consideration of what the right hon. Gentleman suggested earlier, it will also be convenient to take amendment No. 23, in clause 11, page 16, line 36, leave out paragraph (a).

Mr. Smith: We now move to what will prove a more controversial part of our deliberations. We move more directly to the heart of the Government's proposals which are the abandonment of any form of price control or price restraint. This group of amendments seeks to put some of the Government's proposals in the correct perspective. The Government seek to abolish the Price Commission, which was an important feature of the previous Government's counter-inflation policy. We seek to put that situation right by removing the abolition part of the Bill. We seek to strengthen the one part of the Bill that makes reference to prices. That is clause 13.
It is a curious part of the Bill under which the Secretary of State can make a reference to the Director General of Fair Trading. But, once the Secretary of State has received a report from the Director General of Fair Trading, the matter becomes hedged around with qualifications. It may be a matter of major and economic importance, and there are all sorts of dodges whereby the Secretary of State can avoid referring anything to the Director General. Even if a proposed price increase gets round all these hurdles and is referred to the Director General, my hon. Friends will not be surprised to find there is also almost nothing that the Secretary of State

can do except advertise the fact that the Director General has made such a report. In these amendments are proposals to put that situation right and to put some teeth into clause 13.
I am grateful to the House for allowing amendment No. 23 to be added to the grouping. This refers to the important matter of financial targets set by Ministers for nationalised industries, to which the hon. Gentleman referred in our last short debate. That is excluded from the matters that can be referred to the Monopolies and Mergers Commission under clause 11. It is no surprise that the Government took such a precaution in the Bill when they had in mind the savage increases in gas and electricity prices announced only last week.
This group of amendments is an attempt not only to focus debate on the problems of rapidly rising inflation, encountered as a result of Government policy, but to do something in the Bill about these matters. What do the Government say is their counter-inflation policy? The right hon. Lady says from time to time that it rests on two foundations. One of those foundations is what the Government call competition policy. Those are the provisions in this Bill and any successor Bills that may be brought forward. The other leg of the stool is the Government's general economic policy.
I see that the right hon. Lady nods in assent. I am grateful for her confirmation that this is what Government policy on inflation amounts to. I am sure that my hon. Friends will want to examine the policy in detail. But the difficulty is that the inflation problem is probably the most serious for a long time. Inflation, as defined by the retail price index, which has been the basis on which these matters have been discussed for many years—Iam glad that the other index that the Government launched appears to have been ignored entirely by serious commentators—has gone up from the figure of 10·1 per cent. that the Government inherited to the most recent figure of 17·2 per cent. In every month, except one, since the present Government came to office, the retail price index has risen.
I wish to remind the House of the record of the previous Labour Government. Looking at the retail price increases each month, one sees that for the


16 months until April 1979—the last 16 months of the last Labour Government—the RPI was in single figures. We kept inflation in single figures for 16 months. As soon as the present Government come to office, inheriting a figure of 10·1 per cent., we find ourselves with a figure of 17·2 per cent. after only eight months. I do not think that anyone now doubts that the floodgates of inflation have been opened.
The sad truth is that this Government appear to have no counter-inflation strategy. There are not even the glimmerings of a policy, let alone a fully worked out and effectively deployed strategy. There does not seem to be any great desire in the Government to have a proper counter-inflation policy. Not only are the Government inactive in countering and attempting to control inflation. They are also over-active in promoting inflation. This can be seen by looking at some of the economic policies which, according to the right hon. Lady, are part of their strategy. Almost the first action of the Government, in the economic sense, was the Budget with its virtual doubling of value added tax.
The Conservative Party did not go around during the last election saying that a vote for the Conservatives would mean an increase in VAT from 8 per cent. to 15 per cent. As a result of that increase, the price of cars, consumer goods and everything else has gone up massively. There was no indication of that increase before the election. There was reference in the Conservative Party manifesto to a shift to indirect taxation. There were various statements of principle. But, during the election, when Mrs. Shirley Williams demonstrated at a Transport House press conference, using a blackboard, what would happen under Conservative proposals, this drew a denial from the right hon. and learned Gentleman who was soon to become Chancellor of the Exchequer.
It was said that people should not believe the Labour Party propaganda because the assumption was being made that VAT would increase to 15 per cent. Of course, that is what happened. Many people thought that it might go up to 10 per cent. or 11 per cent.—some even thought that it might increase to 12½ per cent. In one swoop, the Government

increased VAT from 8 per cent. to 15 per cent.

Mr. Ioan Evans: It is important to remember that VAT is a tax on spending which appears in the retail price index this year. However, it will be dropped from the RPI next year. For ever and a day, for every £100 worth of goods purchased, the Conservative Government will charge £15 whereas the Labour Government charged only £8.

Mr. Smith: I am grateful to my hon. Friend the Member for Aberdare (Mr. Evans) for drawing attention to that. Within a year VAT will disappear from the retail price index and its effects will not be shown. VAT has to be paid each time one buys a car, adult clothes, a meal in a restaurant and many other items. It was silly for the Government in their smart-alec Budget, in which they tried to show what tremendous tax cutters they were, to make a huge increase in VAT. A redistribution of tax in favour of the better-off sections of the community was involved in the last Budget, not a cut in taxation. We are suffering the effects of a deliberate Government policy which, on its own, put 3·5 per cent. or 4 per cent. on to the RPI for ever and a day.
That increase in VAT was bad enough, but at the same time the Government abolished the Price Commission without warning us in their manifesto. I do not understand why it was not possible for the Conservative Party to say that it would abolish the Price Commission if it came to power. The Conservatives spent most of their time abusing and criticising the Commission. There was nothing easier than to say that they would abolish it, because they do not believe in price controls. The savage increases in VAT were concealed from the British public and we heard weasel words about reviewing the role of the Price Commission.
The right hon. Member for Gloucester (Mrs. Oppenheim) had an uncomfortable time on television when she was asked specifically whether the Conservatives intended to abolish the Price Commission. There was much wriggling but no answer. We were told that the role of the Commission was being reviewed. That review took place pretty smartly—within days—and it was mentioned in the Queen's Speech. The most cynical of us believed that it had been planned all along. I


am cynical. I think that the Conservative Party planned to abolish the Commission but did not have the guts or honesty to state that clearly in their election manifesto.
What have the Government's economic policies done? I do not know of any benefit from competition policies or whether there will be any benefit. Prices are probably the most important issue to consumers. When the right hon. Member for Gloucester was in Opposition, she complained often enough about the dreadful scandal of price inflation.
The right hon. Lady claims that the Government's general economic policies will combat inflation. Let us consider those policies. The Government's monetary policies have driven interest rates up to 17 per cent. For most businesses the effective borrowing rate is several percentage points above that. The borrowing rate is 20 per cent. and sometimes higher. That is the real rate of interest for small businesses that do not have the clout with the lending institutions. If that is not inflationary, one shudders to think how one can describe it.
The interest rate is in addition to the running costs of small businesses and, therefore, leads to price increases to the consumer. The MLR, and, therefore, the real rate of interest, is the highest for many years. The Government's general economic policy is not only stifling economic growth but is directly inflationary in its consequences and will increase prices.
Another aspect of the Government's general economic policies affects millions of people even more directly. I refer to the 15 per cent, mortgage rate. The rate is 15¼ per cent. for those with endowment policies. My mortgage rate increases this month, and I am in the same position as millions of citizens who must pay a great deal more each month as a result of the increase.
I took out a mortgage at 9½ per cent. interest in November 1977 when the Labour Government were in power. I must now pay 15¼ per cent. when a Conservative Government are in office, just over two years later. That amounts to a 50 per cent. increase. Of course, the rate was higher than 9½ per cent. by the time the Labour Government left office. There has been a giant leap in mortgage

rates. Many of my constituents complain that their mortgage repayments have increased massively. They ask where that money is to be found out of what they have left in their salaries after tax. Many of them will find it impossible to find such savage and steep increases out of their incomes. That is one of the Government's general economic policies which they say will combat inflation.
We have still to see the effects of the mortgage increases in the retail price index—it will be reflected in the spiralling rate of inflation throughout the year. Is there any prospect of the mortgage rate being reduced at an early date? Will the Prime Minister intervene boldly, as she did in 1979, when she said to the building societies "Hold your hands. You cannot make the people suffer such an increase"? Then the increase was only to 12 per cent. That appears to be a pretty moderate rate for a Conservative Government in the light of recent history.

Mr. Gwilym Roberts: When faced with a proposed increase in 1974 to 12 per cent. or 13 per cent., the Labour Government made a loan of £500 million available to the building societies at a minimal interest rate and as a result the mortgage rate was kept down.

Mr. Smith: I am grateful to my hon. Friend the Member for Cannock (Mr. Roberts). It is instructive to examine current problems, particularly inflation, and compare what the present Government are not doing and what happened under the Labour Government. A simple examination of the RPI provides an instructive and illuminating comparison.
Another set of policies will have direct consequences on price inflation. I refer to the Government's public expenditure policies. A direct result of the Government's policies on the rate support grant and housing support grant will be inevitable and substantial increases in domestic rates this year. The Government will say that we should blame the local councils and that it is their fault for putting up the rates. Surely, not a sensible person in the country will believe that for one moment. If the Government cut their contribution, that will be reflected in substantial rate increases.
The rates have to be paid by the same people who pay the increased mortgage rates. There will also be substantial


increases in council rents as a result of the cut in the housing support grant. The council tenant will have to pay both increased rents and rates as a result of the Government's public expenditure policies. That leaves out of account the effects on the average family's budget of the inevitable increases that will occur in school meal and transport charges as a result of the Government's public expenditure policies. I am leaving out of account the substantial increases in transport charges now taking place.
5 pm
People in the private housing sector are paying hugely increased mortgage rates as well as higher general rates. People in council houses will be paying the increased rents that are coming pretty smartly and will also have to pay increased rates. In their monetary policy, public expenditure policies and general economic policies the Government are not controlling inflation as the Minister for Consumer Affairs claims. They are promoting it and stimulating price inflation at a greater rate than ever before.
I am sure that my right hon. and hon. Friends read with fascination the glimpse into the future given in some of the Sunday papers by the Chief Secretary to the Treasury where he was speculating on further cuts in public expenditure. We should pay close attention to his view because I believe that there was a deliberate leak. As a result of that glimpse into the future—and forward to the Budget—we now know that there will be an increase in prescription charges and that, for the first time in the history of the National Health Service, patients will have to pay for a visit by a doctor to their homes. That is widely predicted by the Chief Secretary to the Treasury in a hint of things to come.
I have listed a formidable catalogue of change so far. Value added tax has doubled. Interest rates have risen to 17 per cent. The mortgage rate is at 15 per cent. Rapidly escalating rates, school meal charges, school transport charges, general transport charges and increased Health Service charges are to come. Every single aspect of Government policy is pushing prices upwards. It is not a case of the Government not doing anything to pull prices down. Their policies are pushing prices upwards.
Any doubts that the House might have had about that being the general trend of the Government's counter-inflation policy must surely have been removed by the statement on gas and electricity prices by the Secretary of State for Energy last week. I do not know what the Secretary of State for Trade or the right hon. Lady have been doing in the counsels of the Government. If they spoke up, they were not listened to very clearly before the decision that was announced last week. I suspect, however, that they do not speak up at all.
Someone in the Department of Energy worked a pretty smart flanker over gas and electricity prices. When that kind of issue comes up for consideration, there ought in any Government to be an intense debate about the case for increasing energy prices as against the counter-inflation consequences of imposing those increases. There ought to have been a vigorous debate about it, but it looks as if such a debate never took place because the Secretary of State for Trade and the Minister for Consumer Affairs—who, I hope, will reply to the debate—neglected their responsibilities. Either that or they are of so little political consequence in the Government that they were ignored.
Let me remind the House of what the Secretary of State for Energy said in proposing what must be the most savage increases in energy prices ever put before this House. He set targets for the British Gas Corporation which would mean increases of 27 per cent., 28 per cent. And 29 per cent.—I am not sure how the figure comes out, since it is not clear from the statement—over the next few years.
The boldness of the statement was revealing. Hansard of 16 January reported the Secretary of State as saying:
in broad terms, the Government expect domestic gas prices to increase this year by 10 per cent. over and above the rate of inflation, followed by comparable real increases in the following two years."—[Official Report,16 January 1980; Vol. 976, c. 1646.]
The Government are not even saying that they will allow prices to rise in line with inflation. They are saying that they will deliberately add 10 per cent. over and above an existing rate of inflation of 17 per cent. The way things are going—since this is an elastic formula—the Secretary of State for Energy will be able to have real increases of 20 per cent. and 30 per cent. in the price of gas.

Mr. Ioan Evans: There is a crippling steel strike and the Government have announced that we must leave the problems to market forces and not intervene. Yet in the gas and electricity industries they are deliberately intervening to increase prices to a level, apparently, to which the chairmen of the boards of those nationalised industries do not wish to go.

Mr. Smith: That intervention brings me to my second point, which is precisely the one already made by my hon. Friend the Member for Aberdare. Very perceptively, the hon. Member for Gillingham (Mr. Burden) asked a pertinent question of the Secretary of State for Energy. He asked whether the British Gas Corporation had asked for such an increase as was proposed by the Secretary of State. Hon. Members may find this hard to believe, but the reply given by the Secretary of State was:
No. The Government set targets higher than those which the British Gas Corporation wanted. I am happy to make that clean"—[Official Report, 16 January 1980; Vol. 976, c. 1657.]
The Secretary of State said that he was happy to make it clear that he had imposed increases over and above those asked for by the BGC. There is, of course, a problem created by the fact that domestic gas prices were out of line with other domestic prices. That is different from saying that 10 per cent. would be added above the existing rate of inflation and that the increases would take effect in a short period of time and reach a staggering level. There is no justification for imposing a greater increase than that asked for by the British Gas Corporation.
The Government are deliberately increasing price inflation by these decisions. I do not know what the Secretary of State for Trade or the Minister who is supposed to look after the interests of consumers did within the Government when this important decision was arrived at. No wonder dissatisfaction was expressed from both sides of the House when it was announced.

Mr. D. N. Campbell-Savours: Is not the real tragedy of this decision that the lower income groups were not insulated? That is the reason for the great bitterness in the country.

Mr. Smith: There is wide concern in all sections of the community that the savagery of these increases will be inflicted on those with the lowest incomes and those who depend on electricity for their lighting and heating. The abolition of the electricity discount scheme operated by the previous Government and the substitution by this Government of a much smaller scheme is a further reason for concern. We were promised action on this by the Government. The Government were said to be developing a social policy, to use the words of the Secretary of State for Energy. We will wait and see.
The situation with gas and electricity is rather like the one in which the fire brigade arrives at the blaze—we already had substantial price inflation before increased gas and electricity prices—and, instead of pouring water on the flames, it pours on petrol. How can we take the Government's counter-inflation policy seriously when they act in that way?
It is not a matter of accommodating the increases that happen as a result of increased oil prices and all the other things which Governments cannot control and should not even pretend to control. Here the Government are deliberately causing price inflation. That is all the more reason why there should be some protection for the public against rapidly accelerating inflation. The Government have been throwing caution to the winds in their economic and counter-inflation policies and there is no protection for the public. Indeed, the existing protection afforded to the public has been abolished by the Bill. The Bill could be more accurately described as the Abolition of the Price Commission and Price Control Bill than the Competition Bill.
I hope that the right hon. Lady will reply to the debate. During her period in Opposition we frequently heard her in the House, on television and in different parts of the country, shopping bag in hand, weeping crocodile tears about the problems faced by the housewife under the previous Labour Government. She will have the opportunity in this debate to tell us what she has done about those problems since she became Minister for Consumer Affairs. We have seen inflation and the RPI rise from 10 per cent. to 17 per cent., and they are still heading sharply upwards.
I hope that the right hon. Lady will tell us which of the economic and monetary policies to which I have referred will help to reduce inflation and bring it under I control. As I understand the Government's policies, they are designed to push up inflation. That is the most important aspect of the Bill. We shall press the clause to a Division in the hope that we shall be able to persuade one or two Conservative Members, who are angry and disappointed at the out-turn of the Government's policy—there must be many of them on the Government Benches—to support us.
The most important feature of the debate is our indictment of the Government for the fact that they have not been successful with their counter-inflation policy and have not encouraged the nation to expect to win the battle against inflation. What sort of psychology is it almost to double the rate of value added tax from 8 per cent. to 15 per cent. and to increase savagely gas and electricity prices? The public were becoming educated about the vital need to bring inflation under control. What sort of example are the Government setting? What is the psychology that they are adopting?
The Government's actions will encourage no one to take seriously a counter-inflation policy. Such a policy must always be desperately serious, but the Government will encourage no one to take that view while they continue to behave as at present. They are doing a grave disservice to the economy in pursuing their present policies. The clause will help slightly to ameliorate their effect. That is why I commend it to the House.

Mr. Anthony Beaumont-Dark: If we listened to the right hon. Member for Lanarkshire, North (Mr. Smith) with our eyes closed, we could imagine that he was speaking either on the Budget Statement or at the hustings. Much of the right hon. Gentleman's speech was irrelevant to the amendments and the new clause.
We believe that the Price Commission is an anachronism. It did little during the period of office of the Labour Government to control prices. The right hon. Gentleman would have us believe that the Commission kept down prices and

that it contributed to businesses being run more efficiently. He suggested that it stopped rapacious firms from taking great extra profits that they had not earned.
If I remember rightly, we had the greatest increases in prices since the black death while we had the Commission "helping" everyone by keeping down prices. Either the indexes were wrong or the right hon. Gentleman is wrong today. I should like the Commission to stay if I could believe the twaddle that has been spoken of it. It seems that the Socialist Party is trying to convince itself that the Commission worked. I agree that it provided extra jobs, but it created chaos and mayhem. Indeed, the jobs that it created must be judged by the standard of usefulness.
The Commission greatly altered the planning of many industries. It diverted management—senior management at that—from producing goods because of the varied and long-winded reports that the Commission required before it made up its mind. Individual companies in the food industry spent over £350,000 answering the questions that the Commission asked of them and in presenting their cases. The chemical industry spent over £600,000. The banks spent over £350,000 on the credit card system investigation.
What was the outcome? The Commission could hold back reality only for a month or two. The greatest use of the Commission came to the Labour Government in their dying days. That was when the Commission was most useful. It held back price increases because of the coming election. It did not stop the increases taking effect but it delayed them. As a result, many companies that needed working capital and extra money to increase wages had that funding withheld.

Mr. Gwilym Roberts: The hon. Gentleman claims that many companies were concerned about the amount of work that they had to do for the Price Commission and the delaying of necessary price increases by the Commission during the latter months of the Labour Government's term of office. The Conservative Government are doing away with the Commission. They are introducing a package of other policies. Against that background, why is it that business confidence now is lower than it has ever been?

Mr. Beaumont-Dark: I do not accept that business confidence now is lower than it has ever been. The problems that industry faces include many that the Government inherited from the Labour Government.
The right hon. Member for Lanarkshire, North spoke about interest rates. That argument was advanced by various Labour Members in Committee. The right hon. Gentleman and his hon. Friends seem to suggest that it is deliberate Government policy to increase minimum lending rate to 17 per cent. What utter nonsense that is from anyone who is not entirely economically and financially illiterate. Have they not heard of interest rates in the United States? They have increased to over 16 per cent. Shortly before the Conservative Government took office, minimum lending rate in the United States—I use the same term for the United States—was nearly 11 per cent. Have not Labour Members heard about interest rates in Japan? They are at levels that have never been reached before. The same comment applies to Sweden and Holland. Does it need to be explained to Labour Members that if there is a vast differential interest rate structure the United Kingdom will lose enormous sums because money will go to other countries?

Mr. Robert Hughes: rose—

Mr. Beaumont-Dark: I shall give way shortly.
We must keep a sense of reality. In the right hon. Gentleman's peroration in what I might call his Budget speech, he asked "What will turn back inflation? What will kill inflation?" Of course, inflation is at a frightening level.

Mr. Hughes: Before the hon. Gentleman leaves interest rates—

Mr. Beaumont-Dark: I shall come back to them.

Mr. Hughes: I hope that the hon. Gentleman will do so. If there is a differential interest rate structure between various countries, it will have less effect if exchange controls are retained. It was the abolition of exchange controls that led directly to increased interest rates in the United Kingdom and in other countries.

Mr. Beaumont-Dark: I have never heard such utter nonsense.
Price Commissions will not kill inflation. All that a commission can do in the end is delay reality. It is worth while studying the Russian economy. I am talking not about wicked Communism but absolute State control, where people's lives are controlled and there is control of economic reality, so called, from the womb to the tomb. The Russians have tried to implement it. All that happens is the development of a black market. It has developed hugely in Soviet Russia and it would develop to a greater degree in the United Kingdom. In a climate of absolute State control, companies are asked to produce goods at uneconomic prices. They are not able to borrow the money to do so because they will not be able to make a profit. Therefore, the goods cannot be produced.
In Russia the price of goods, when they are available, is increasing by about 27 per cent. a year. Russia has no Price Commission but has totalitarian power. If it cannot control prices, what hope is there of some wretched little body, such as the Commission, holding back prices in this country?
The factor that will reduce inflation should be simple for anyone to understand. Realism will reduce inflation. We cannot have half the population earning money and the other half expecting it to earn its share as well. The Conservative Government are not against the steel industry or the gas consumer. However, we cannot expect profitable industry to compete in an open and wide world while its profits have to be taxed at a rate sufficiently high to cover the losses that the steel industry is making. That is realism. Of course gas prices have to rise.
The right hon. Member for Lanarkshire, North has it wrong yet again. He mentioned that a charge will be made for the doctor-at-home service and that hospitals will make hotel charges. If he had bothered to be in the House this afternoon when my right hon. Friend the Prime Minister replied to that very charge, he would have heard my right hon. Friend make it clear to the Leader of the Opposition that the Government have no intention of doing that and that the money for the Health Service will remain the same, if it is not improved.
To try to bolster some weak and weary case, the right hon. Gentleman spoke of the elderly and claimed that those who cannot afford increased charges would suffer most. If he bothered to read what my right hon. Friend the Secretary of State for Energy and my hon. Friend the Under-Secretary of State for Energy have said on the matter, he would know that they have made it perfectly clear that the old and those who are unable to pay will be protected. A statement on the matter will be made at some future stage.
It is no good Members claiming that the Price Commission somehow helped to keep down prices.

Mr. Campbell-Savours: rose—

Mr. Beaumont-Dark: I am not giving way. The hon. Gentleman will have the opportunity to make his important points in his own time.
It is perfectly clear that the Price Commission did little, apart from causing great aggravation. As I understand it, the Government propose to use the powers under the Bill, under the Monopolies and Mergers Commission and under the competition elements of the Office of Fair Trading, to ensure that industry genuinely competes.
I hope that when we come to the question of mergers we shall cease to ask "Why not"? and ask "Why?" When analysing the mergers that have taken place since 1970, it will be seen that 62 per cent. of companies are earning less today than before the merger, 65 per cent. are employing fewer people and the majority are producing fewer goods. Most mergers do not take place because it is believed that competition or productivity will improve. Most mergers take place to try to thwart competition.
I hope that the Government will use their powers genuinely to investigate proposed mergers. There is nothing wrong with companies trying to take over something, but it is the Government's job to see that they do not do so if it is against the public interest and restricts competition. It is the Government's job to see that laws, whether in regard to private enterprise or trade unions, are obeyed in order to protect those for whom they are made.
I hope that Opposition Members will vote with the Government on the matter. All the evidence proves that this is a commonsense Bill. It is a proper manner in which to encourage people to compete rather than have a fool's paradise proposal, believing that a Government Department can insist that companies produce at a loss. They will not, they should not, and it does not make sense. That is why the Price Commission must be abolished.

Miss Betty Boothroyd: Whatever the wording in the Conservative manifesto, there has never been any doubt in my mind that the Government were always committed to abolishing the Price Commission. The reasons that they have put forward from time to time have varied. It is argued that the activities of the Commission inhibited investment and did not prevent price rises, and that the bureaucracy of the Commission was not cost-effective.
When the Price Commission Act 1977 passed through the House, the right hon. Lady who is now the Minister for Consumer Affairs gave additional reasons for her opposition. I did not see the television broadcast referred to by my right hon. Friend the Member for Lanarkshire, North (Mr. Smith). The right hon. Lady has always been consistent in her opposition to the Price Commission. She repeated her reasons for her opposition in a Standing Committee when the Bill was debated upstairs. At that time she referred to the 1977 Act and said:
I made my position on the powers…extremely clear on Third Reading when I made it clear that our opposition to the Bill was outright because of its powers, duration and lack of adequate safeguards. It was the powers to which we were objecting."—[Official Report, Standing Committee B, 1 November 1979; c. 87.]
That was a fair and clear statement. The Conservatives objected to the Bill outright. They objected to the powers of the Commission. It follows that if the powers were too weak, the right hon. Lady—as champion of consumers—would be championing legislation to increase and strengthen those powers. That is not the case. I can conclude only that the powers are too strong and that the mechanisms that went some way to safeguard those who finally do the paying had to be abandoned in favour of a policy known as the exercise of competition.
Competition has a role to play in countering inflation. It cannot be carried out with any degree of success without relation to a price control mechanism. That is why I support the new clause and the amendments. We are asking that the functions, duties and powers of the Price Commission be transferred to the Director General of Fair Trading.
It has been argued by previous speakers that the Price Commission has little or no effect and that in a small percentage of cases only, where prenotification was given, was any action taken. We have to accept that, because there is substantiating evidence. What it is not possible to obtain is evidence of the deterrent effect of the Commission on those who wished to increase their prices but did not do so because they were deterred by its sheer existence.
It is not easy to make an assessment of what would have been the position had there been no prenotification of increases. The requirement to notify price increases by manufacturers restrained manufactuers from increasing the prices of their commodities. If a company can increase a price without reference to anybody, obviously it will do so. The fact that the Price Commission existed and that claims for increases had to be justified acted as a restraint and disincentive to those who wished to make higher charges.
I remind the Government that in matters relating directly to the public it is important to consider price increases that are of general public concern, even though it might finally be concluded that those increases were justified. I remind the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) that in a democracy the Government must show the electorate that price increases are justified, in the same way as they have to demonstrate from time to time that increases are not justified.
If the Opposition amendments are not accepted, the ability to monitor and supervise prices will disappear. The Secretary of State indicated as much on Second Reading, when he said that he was putting powers into the Bill. I believe that it was not his intention to act on those powers. If he should decide to act on them, there are wide restrictions on their use. As I understand it—I am sure

that if I am wrong I shall be corrected by the Minister when he replies—if the Secretary of State refers a price increase for investigation under clause 13 there are no powers to deal with the price increase, even if it should turn out to be excessive. I believe that he would have those powers under new clause 3 and the amendments. Perhaps we can have some clarification on that point when the Minister replies.
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My right hon. Friend the Member for Lanarkshire, North spoke of the real problems of small businesses. I should like to give an example of a case that I came across at the weekend, because I should like the Minister to reply in principle and tell us what the position nowis. The case concerns a small business man. In fact, only he and his son are involved in the business. He showed me two gas cylinders, one containing Calor gas and the other propane gas. He told me the price that he had paid in December and the price that he had paid in January. There had been a 5 per cent. increase. He asked why there had been an increase, and he was told that, although the price of bottled gas had not been increased in the Government's statement, as the Government had increased the price of other fuels those companies would also increase their prices.
There used to be mechanisms whereby Members of Parliament could do something about that. What mechanisms now exist to deal with that situation? I ask this as a matter of principle, because that is what is happening today. It seems to me that the Government have given a licence for the price of other types of fuel to be increased, which in itself is a recipe for inflation.
One of the many complaints about the Price Commission was that it stored up inflationary increases—that there was a pipeline. I know that the Minister for Consumer Affairs is very fond of making speeches to her supporters warning of the Labour legacy that was in the pipeline. In fact, not many months ago she passed around the Kleenex tissues to her supporters, told them a sob story and listed some items that were in that pipeline. She told them that there were rent and rate increases, but she did not say that because of the Government's reductions in rate support grant and expenditure on


housing, householders would find themselves faced with increased rents and rates.
She claimed that Labour had left a legacy with regard to house prices, yet every owner-occupier with a mortgage is now paying a record rate of interest. When we left office the mortgage rate stood at 11·5 per cent. It is now 15 per cent., and that reflects itself in the retail price index.
I remind the right hon. Lady that it was not a Socialist pipeline but a Tory Budget that increased the price of petrol by 10p a gallon and that now one company after another is leapfrogging. The right hon. Lady also spoke of the price of holidays and said that they were in the Socialist pipeline, but she omitted to say that 15 per cent. VAT had increased the price of those holidays. In addition, as we saw last month, beer prices have increased.
Milk was 13½p a pint in May. Next month it will be 16½p a pint. That has nothing to do with Labour's legacy; it is the result of the devaluation of the green pound over the last nine months. The right hon. Lady also warned of Labour's legacy in regard to bread prices, but failed to say that it had nothing whatever to do—

Mr. John Wells: I believe that the hon. Lady has a house in a rural area and that she is well acquainted with many farmers. Does she not agree that while the devaluation of the green pound may have an adverse effect on the budget of the urban housewife in the short term, unless the British farmers—who are the hon. Lady's friends and neighbours—have a proper standard of living and income, British farming will go out of business in the foreseeable future, as a result of which the cost of living will soar?

Miss Boothroyd: I take that point entirely, and I should like to answer it in two ways. The farmers whom I know have done very well out of the EEC, have sold their prize Jersey herds and have received large EEC subsidies as a result. All I am saying is that there must be some balance. It is perfectly true that farmers and farm labourers must have a proper income, but there must be a balance somewhere and I do not believe

that the Government have achieved it. Those are the points that I am making, and I feel that I am perfectly justified in doing so.
I was talking about the price of bread, which again has very little to do with Labour's pipeline. The right hon. Lady said nothing at all about the two big milling and baking concerns that I understand control 70 per cent. of the market. I checked the figures yesterday. As I understand it, it was the right hon. Lady's own Secretary of State who stopped the Price Commission inquiry into that industry. As I see it, the powers of the Price Commission could not have been all that ineffective when Ranks Hovis McDougall, Allied Bakeries and the entire Retail Consortium wanted to get rid of it, and did so with the help of the Conservative Party.
I shall not go into gas and electricity prices, because those were dealt with in earlier speeches. However, the right hon. Lady suggested that commodity price increases were also in the pipeline. Yet in the debate in Standing Committee she referred to the previous Labour Government in regard to commodity prices and said:
over the whole period of that Government commodity prices, exclusive of oil, went up by less than 2 per cent. a year on average, which is one of the lowest rises in commodity prices for any period in recent history."—[Official Report, Standing Committee B, 1 November 1979; c. 100.]
How does the right hon. Lady justify that statement when she told her supporters a few weeks earlier that there were a lot of commodity price increases in Labour's pipeline? She made that statement at a Conservative barbecue dance in July 1979. Which way does she want it?
The only consistent attempt that the Government have made with regard to inflation has been to throw the blame on to the previous Government, without recalling that when we left office the rate of inflation was 10·1 per cent. and it is now more than 17 per cent. However, I give credit where it is due. The right hon. Lady has always been generous in suggesting that although she herself is not in the Cabinet, and that there is no consumer voice in the Cabinet, her Cabinet colleagues shoulder the responsibilities for an effective counter-inflationary policy and that the voice of


the consumer now takes on a very different direction in Cabinet compared with the impact that it had under the previous Government. At that time she said that the voice of the consumer was not heard at all. Here again, she told the Standing Committee:
Now that balance is being redressed. The voice of the consumer is becoming more important…That is the important difference in character between the two Cabinets."—[Official Report, Standing Committee B, 1 November 1979; c. 94.]
Last week the Secretary of State for Energy was asked whether he had received representations from the gas and electricity consumer councils. He said:
The views of the consumer councils have not yet been conveyed to me in detail."—[Official Report, 16 January 1980; Vol. 976, c. 1658.]
From that it is obvious that the Cabinet took the decision without any consumer voice in the Cabinet.

Mr. Alan Williams: Does my hon. Friend agree that if the right hon. Lady were in the Cabinet it would hardly represent much of a voice for the consumer? When I was involved with prices during the early part of the previous Administration and we introduced "Operation Price Check" with the red triangles and the agreements to hold prices at a set level—far from representing the interests of consumers, the right hon. Lady wrote a letter to one of the companies that was co-operating in the scheme and told it that it was betraying its shareholders in doing so. When the letter was made public and when I released it to the press, far from denying it or trying to explain it away, all that the right hon. Lady did was to say that the letter must have been stolen from a cabinet when she was moving rooms in the House of Commons. Therefore, she was never on the side of the consumer.

Miss Boothroyd: I thank my right hon. Friend for that intervention. There are many of us who remember that. Even so, I am sure that my right hon. Friend would agree that what we seek is a voice for the consumer in the Cabinet today. When one looks at the inflation rate and talks not only to our constituents but to other members of the public whom we meet on a bus or a taxi, it is obvious that they realise that little is being done about consumer affairs. When I talk about consumers, I refer to those who at the end of

the day have to do the paying—the general public.
I am afraid that the faith that the right hon. Lady has in her colleagues is ill founded. Any prospect there might be of seeking redress for the consumer, which is what we are talking about, is impossible under this Government. It is about as easy as getting blood from a stone.
I hope that we shall have further speeches on this matter from the Opposition and that the Government will look carefully at the amendments and the new clause and see to it that the consumer has a fair deal in a period of high inflation.

Mr. William Hamilton: My right hon. Friend the Member for Lanarkshire, North (Mr. Smith) referred to the misleading title of the Bill. The Bill is like a lot of others that we have had with misleading titles. An example that springs to my mind as a Scottish Member is the Bill that dealt with compulsory sales of council houses, which was called the Tenants' Rights, Etc. (Scotland) Bill. I should have thought that that was a deliberate distortion of the Trade Descriptions Act.
The right hon. Member for Gloucester (Mrs. Oppenheim), when in Opposition, made great play about her shopping basket. She probably never shops, except for party political purposes. She made great play of the idea that all the price increases under the Labour Government were due to the inefficiency of that Government. If that charge was true then, it must be true now. All the price inreases that are now coming through, taking to its conclusion the argument that the right hon. Lady put forward 12 months ago, must be the direct responsibility of the present Government.
For that reason, I was interested in and excited about the headline in the Tory newspaper, the Daily Express, on Friday 18 January, which read "What Flaming Cheek". That headline referred to the increase in the price of gas, to which I shall come in a moment.
When the Bill was introduced, the argument was that competition would keep prices down. It was said that the consumer would be sovereign and that he or she would choose between one shop and another and that that would be more effective than the Price Commission. Let us look at what happened.
The Government believed that nonintervention in this and other areas would solve our problems—not immediately, but in the long term. The Chief Secretary said at the weekend that we were on a stony path, but it was not leading into a cul-de-sac. That stony path is leading us into something much worse than a cul-de-sac; it is leading us right over the top of the cliff to disaster. We shall see who is right in this respect.
I want to refer to two or three examples of what has happened, before the Bill has become law, under the philosophy practised by the present Government. First, let us look at petrol and oil prices. Through the Price Commission there was a considerable degree of control over the oil companies. The Commission could call for facts and figures from the oil companies and could delay price increases, which mattered greatly to the consumer. The consumer knew that the Commission acted like a watchdog and looked at what those companies did.
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Ineffective as the Commission was, by heavens it was better than what we have now. Virtually every week the oil companies get together and say "What shall we charge those mugs now?" That is how the oil companies treat their clients. They treat them as mugs because they know they have friends in Government, and that allows them to do exactly as they like.

Mr. Campbell-Savours: The Shah of Iran, for example.

Mr. Hamilton: Yes, the Shah of Iran is a good example of the kind of friend the Government had at that time.
The brewers are exactly the same. They had to answer to the Price Commission and give facts and figures about their profit margins, increasing costs, and so on. Inadequate though that was, it was much better than allowing those companies to do just what they liked. It was much better than allowing the brewers to increase the price of beer and alcohol of all types. Now the brewers can sit down any day, week or month and decide to charge exactly what they like, and that is what they do.
I have here a copy of the Scottish Daily Record dated 4 July 1979, referring

to the price of petrol being £1·18 a gallon. That was in July last year. No less than three weeks later, on 22 July, the Sunday Mail reported that the dearest petrol in Scotland was not 118p per gallon but 141·9p per gallon. The price of petrol is much higher than that today. The competition that those papers were talking about at that time was not in prices but in gifts, such as drinking glasses, coffee mugs and toys. That was the type of competition that was going between petrol companies and that is what they were being allowed to do by this Government.
The Secretary of State for Energy, as long ago as last June, emphasised his belief in this kind of policy. He refused to intervene. He thought it was better to let prices rip. He said that the only sensible way of using fuel was to ration it by price. He was quoted in The Daily Telegraph of 6 June 1979 as saying:
We must all share the misery.
The Secretary of State gets off to a good start himself, does he not? There is nothing cheerful about him. He has a lot to be miserable about, and he is also making millions of people miserable.
That sentiment was underlined by the Chief Secretary to the Treasury last Saturday. He used these words:
Britain faces three years of unparalleled austerity.
He, too, has a good start. Let us take the right hon. Members for Oswestry (Mr. Biffen) and for Guildford (Mr. Howell). What a cheerful pair they are. They are a good example of government through misery.
The package that the Chief Secretary put forward to his Tory minions on Saturday not only gives freedom to the brewers, the petrol companies and the tobacco companies. When the Budget comes in March, the Government will increase the price of the commodities of those industries still further. The taxes on beer, alcohol, cigarettes and everything of that kind are going up, so there will be an enormous boost in the cost of living index.
What do the Government expect workers and their wives to do? The wives will say to the workers "You had better get an increase in pay. We are not going to allow this Government to reduce our standard of living by deliberate and malicious intent. We are going to


react." This is the great fight against inflation about which we hear so much.
The Tories, in their manifesto, used these words:
Mortgage rates have risen steeply because of the Government's financial mismanagement.
That was at a time when mortgage rates were 11¾ per cent. The right hon. Lady, the painted-faced lady, the Prime Minister, faced with the possibility of mortgage interest rates going up some time last year, intervened. There was then no question of non-intervention by the Government. The Prime Minister persuaded the building societies that owner-occupiers would be clobbered by an increase at that time. Indeed, she paraded her victory in this House and said "What a great gal I am. I have influence over the building societies. I can stop them from putting up their interest charges."
What now? Mortgage interest rates are now 15 per cent., and it is highly likely that they will go up still further in the next few months. I hope that all those owner-occupiers who voted Tory at the election get a good clobbering, because they deserve all that they are going to get, but I hope also that they have learnt that they were deceived by the most monstrous con trick of the Tory Party at the election.
On the latest scandal—gas price increases—I got a letter this morning from a constituent, and I want to quote that letter. I shall give his name and address, because he asked me what representations I had made on these matters in the House. I want to send him a copy of what I am going to say.
The letter is from Mr. John Honeyman, of 348 High Street, Leslie, Glenrothes, in the Fife, Central constituency. He writes:
Dear Mr. Hamilton,
I am writing to you as my representative in Central Fife about the 27 per cent. increase in gas charges
—I think that it is 29 per cent., but it is hard to keep up with these increases as they are happening so often—
that are going to be implemented shortly. I know that you have already made yourself heard in the Parliament about the same issue. There are also rises in phone charges, postal charges, electric and coal and also rates. How on earth does Mr. Howell expect old people and infirm to manage on the money we get? In my own case the only help I get is a rate rebate, and that is not much. I would ask you and all those who think likewise to hold out against these terrible increases and force

this Conservative Government to change their minds on this issue or I am afraid they will never again hold office in this country and the people of Scotland won't stand for much more of the Scrooges of this Government. There is also the big increase of VAT that was put on at the time of the budget.

Mr. Robert Hughes: Look at them laughing.

Mr. Hamilton: This is a very good letter. This is grass roots stuff. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) is laughing his head off. He thinks that it is great. He thinks that it is funny. This is a letter from an old-age pensioner who is trying to struggle along. Old-age pensioners did not vote for this lot here. Scotland did not vote for this lot here. The Labour Party in Scotland got 40 out of the 70 seats because it knew what a load of thugs the Tories were.
The letter continues:
Could Mrs. Thatcher or Mr. Howell live on our miserable pension? I am afraid not. So I would hope that everyone in Parliament that has any compassion for the old and helpless will make your voices heard loud and clear. I hope you will excuse writing as I am in my eighty-first year. I also live alone having been a widower for 26 years.
That is the kind of thing that has to be put up with from this Government. These are the people who will suffer from the increases that were announced last week. I do not know how these people will survive this winter. Only last week there were two or three deaths from hypothermia in the Dundee area.

Mr. Gwilym Roberts: I am sure that my hon. Friend will wish to remind the House that that type of person was often supported by local authority social services and that this Government have been removing the possibility of providing such support from local authorities.

Mr. Hamilton: I was about to make that point. This fellow of 81 would qualify for the Government's rebate scheme, because it is for the over-75s.
A further point on this matter is that not only are wages in rural areas in Scotland generally speaking much lower than in other parts of the United Kingdom, but it is cooler in those areas. Therefore, on both counts those people will suffer as a direct consequence of the increased charges for fuel that were imposed by the Government last week.
The Government criticise the nationalised industries. Indeed, the Prime Minister said that the British Steel Corporation must exercise its right to manage in negotiation with the unions. But the Government say the opposite to the gas industry. They say that it is not to be allowed to manage. The gas industry did not want these increases, but the Government have insisted that these prices go up not only to keep in step with inflation but 10 per cent. above the odds.
We have a crazy set of ayatollahs sitting on the Government Front Bench. They will drive this country to revolution because the people will not put up with this situation much longer. They see the Government deliberately imposing ever-increasing misery on this country, and they will revolt against them, and very shortly. When the results of my election were coming through in May, I forecast that within 12 months we would have a general strike. I still believe that that may be true.

Mr. Gwilym Roberts: I support the need for new clause 3 or some effective machinery to replace the Price Commission.
I accept that the Price Commission was often ineffective. From time to time many Labour Members complained bitterly about the ineffectiveness of the Commission, but it had two important effects. First, it had a deterrent effect. It is impossible to measure the magnitude of the deterrent effect of the Commission Secondly, it made the community feel that it had a defender, however ineffective that defender was. It made the community conscious of the problem of inflation. People thought that there was some sort of caring about the problem within the Government. They are now rapidly coming to the conclusion that the Government do not care two hoots what happens to inflation.
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I shall not cover the matters already dealt with so adequately by my right hon. and hon. Friends. The Government have imposed increases in prices of commodities such as gas and electricity—let us not forget that they removed the important controls that kept the price of paraffin down for poorer families for many years—and food prices also have

gone up steeply since the Government came to power.
The Minister for Consumer Affairs will remember very well her shopping basket. Where is the shopping basket now? She spoke to the House then with wrath and fury about prices. Since the election we have not heard her speak with the same venom about price increases.
I shall touch on the type of increases that have been imposed through local authorities.

Mr. John Fraser: The right hon. Lady is even now trying to avoid answering questions on the retail price index by trying to pass them to another Department.

Mr. Roberts: That does not surprise me in the least. The Government have already introduced a number of indices to cover prices. I have a horrible suspicion that those indices will be used for other purposes in the months ahead.
Clearly, one of the problems has been the sorts of increases that have been imposed by local authorities, and not only in rent and rates, for it is also proposed to increase the price of school meals and school transport. One of the worst aspects of the inflation created by the Government is the way in which they have tried to use local authorities throughout the country to carry out their dirty work. They have not been prepared to pass on the increases directly to the consumer but have forced local authorities to push up prices steeply.
I wish to deal specifically with the recent price increases that have been imposed by the brewers. Many sober hon. Members may not be so concerned, but many of my constituents are extremely concerned. As always at this time of the year, there has been a great spate of increases from the brewers. In previous years, those price increases were referred to the Price Commission. The Commission more often than not delayed them. The brewers, of course, are close to the heart of the Conservative Party. They are major contributors to it, in every sense.
I understand that the increases in January will be between 3p and 6p a pint. There are wide regional variations. January is the month when all the brewers put up their prices to suit their needs. This year the Price Commission


mechanism is no longer in existence. I asked the right hon. Lady only yesterday whether, in these circumstances, and in view of the fact that brewers generally are introducing a similar increase, she would not now refer the matter to the Monopolies and Mergers Commission.
Many hon. Members will remember the Price Commission report on the brewery industry. Concern was expressed about the profits and investment programmes of the industry. It was also pointed out that even if it did not have a global monopoly there were considerable regional monopolies in the hands of the industry.
With confidence I asked the right hon. Lady yesterday to refer to the Monopolies and Mergers Commission the matter of the generalised increase by the brewery industry. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) rightly said—I praise him for it—that the Government should do something about it, but yesterday the right hon. Lady told me that this was a matter for the Director General of Fair Trading. In other words, the right hon. Lady was shelving all responsibility for the increases. She said that the reference is a matter for the Director General of Fair Trading, and according to the right hon. Lady he apparently had no intention of doing anything about it. The argument that references can be made to the Monopolies and Mergers Commission does not work. In the supreme instance of the breweries, we see once again that not only is the right hon. Lady not prepared to do anything but even such mechanism as is available is completely ineffective.
When the Labour Government were in power, the right hon. Lady frequently claimed that that Government had doubled prices during their four years in office. We have heard that said time and again. I am sorry that the hon. Member for Worcestershire, South (Mr. Spicer) is not in the Chamber. He is a numerate member of the Conservative Party and could tell the right hon. Lady that, judging by the rate at which the Government are increasing prices, they will far more than double them if they are in office for anything like their full term.
The Government have not only already increased the rate of inflation by 7 per cent. The dastardly thing is that, of the

7 per cent.-plus increase in inflation, the Government have directly contributed over 5 per cent. That lies directly at their door. If they look at the forecasts on inflation for the next year or two, they will find that all the forecasters predict that the level of inflation within the next two years will reach between 20 per cent. and 25 per cent. One or two suggest even 30 per cent. That could well occur under this Government.
If we assume that the Government's policies succeed, according to their interpretation of success, what is their target? I understand from the Treasury that the target is to get inflation down again to 10 per cent. by 1982–83. Is that not the figure with which they started? Even if they succeed, after all the misery and trials that they have imposed, they will have got us back to where we started. That is an indictment of the Government and their price policies. We need some mechanism to protect us against this sort of price movement.
The Government are pushing price increases on to our people. They should at least provide the mechanism to protect the public against the Government's own action. That is all that the new clause proposes.

Mr. Robert Hughes: The more one listens to the Government trying to justify their policy, the more one comes to the conclusion that the days of "Nineteen Eighty-four" are already with us. Many more people should read George Orwell's novel, because it is clear that the Government have adopted newspeak as their official language. Things are not what they are said to be. The title of every Bill is the direct opposite of the intention within it.
I hope that the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), who is about to leave the Chamber, will stay with us as I intend to refer to his very interesting speech, which I followed with great care. He started by making a very stout and spirited defence of private enterprise as a method of competition and of keeping prices down. Perhaps he was diverted or distracted by one or two interventions, because he concluded by saying that there was a need for the Government to intervene where mergers and so on were against the public interest.
The hon. Gentleman made a savage attack on the business practices in this country as a result of which mergers take place and where, apparently, efficiency is reduced, production is reduced and fewer people are employed. He did not say that these companies were making smaller profits, although many may be doing so. But it was curious that his speech began by saying that the Government should leave everything to private enterprise and ended by admitting that there are business practices in this country which need to be controlled and which have nothing to do with the law. I took it that the hon. Gentleman was not suggesting that these companies were selling shoddy goods, unsafe goods or goods of inferior quality but that they were all ganging up to shut out the small man and prevent real competition taking place. That is why the Competition Bill, so called, is a complete misnomer and the direct opposite of the truth.
I sometimes, in my innocence, try to work out exactly what are the Government's targets. They tell us that they are to control inflation and to keep prices down, yet we have interest rates at record levels. Despite what the hon. Member for Selly Oak said, I very much doubt whether it would be right to say that there is no connection between the abolition of exchange control and the increase in interest rates. The only reason for increasing interest rates was to make sure that money either came to this country or, perhaps more importantly, stayed in this country. The very high interest rates would not have been so necessary if we had retained exchange control.
There has been a knock-on effect and as a result of the increase in interest rates mortgage rates have also increased. The Minister for Consumer Affairs and the Prime Minister would not today meet the kind of reception that they once expected to get in middle-class suburbia, where the people they claim to represent, the middle class, are striving to make their way upwards in the social scale but are being hit very badly by the level of mortgage rates. The young first-time buyers are being hit worse than anyone else by the high mortgage rates. I know that recently there has been a slight hiatus and a slight levelling off in house prices.

Nevertheless, the people who are having to pay vastly inflated sums to buy modest houses are finding the mortgage rates very hard to bear.
The Government are living in some respects in a kind of compartmentalised world. They do not seem to have any conception that what one Department does has an effect further along the line. The Minister for Consumer Affairs failed very badly in her duty in not pointing out to the Secretary of State for Energy the effect on prices generally that the gas price increases will have.
We are told that gas prices are to be increased by 10 per cent. more than the rate of inflation. At the same time—I say this as an aside, but it is a very important point—if workers ask for wage increases plus a percentage, they are condemned out of hand, not simply for trying to maintain their existing standard of living but for trying to better themselves and improve their standard of living.
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Gas prices are very important to the consumer directly, but there are also many industries in which gas is a primary fuel, either directly in terms of manufacturing or in terms of heating. I wonder what sort of price increase will be passed on to the consumer as a result of the gas price increases. I wonder whether companies will feel that they must pass on prices which are 10 per cent. more than the rate of inflation and that they must then ask for another10 per cent. over and above that.
What determines the basis of inflation? There is certainly an argument whether inflation is caused by wage increases or by cost increases, or about the extent to which either of these is responsible. But if 27 per cent. or29 per cent. is added to basic fuel costs—because electricity, coal and oil prices are all going up—that must affect the rate of inflation. There is a sort of multiplier effect. Because of the price increases in primary fuels, the rate of inflation goes up. The seller of primary fuels has to get in even more money to stay 10 per cent. ahead of inflation, so that inflation goes up yet again. The gas price increases are directly fuelling inflation, and they affect every part of industry in the country.
But what about private industry'? Many of us have long suspected that, in determining its pricing policy, private industry does not sit down and do a complicated sum and then decide that it costs £X to produce a commodity, that a return of Y per cent. is needed just to cover the original investment, that another Z per cent. is needed in order to pay the shareholders, and that another percentage on top of that is needed for reinvestment purposes. In my younger days, when I looked at business affairs, I understood that some money was always set by for replenishing worn-out machinery. That practice now seems to have gone by the board. It is now a very old-fashioned idea, apparently. Perhaps some of us did not really believe that that was how it was done but knew that a company would test the market and that the price of the product was what the market would bear and had no relation at all to production costs or to the amount of money involved.
Now, the Government have adumbrated a new business principle, by which the price of the product has to be compared with the prices of other products. If a company's product is cheaper than that of another company, the reaction is not one of satisfaction. Instead, the reaction is to put up the price, because the feeling is that if the product is sold for less than another similar product, people may think that it is less valuable. On top of that, as I was saying earlier, a company now has to ensure that its product is priced at a figure that is 10 per cent. above the current rate of inflation.
I wish that someone in the Government would explain how, by increasing every cost that industry and commerce have to pay, they can possibly hope to reduce inflation. The truth—and I wish that the Government would sometimes tell the truth—is that they have no control over inflation and, what is more, they have no intention whatever of doing one minute thing to halt the rate of inflation or to try to slow it down.
As far as the Government are concerned, the public must bear the cost of inflation and in the harsh world of reality everything will be all right. The Government think that they can repeat time after time the tired old story—like a gramophone needle stuck in its groove—that all these price increases were in the pipeline. Any fair-minded person will

accept that price increases that take place the day after an election can hardly be blamed on the present Government. The same might be true if price increases took place the second day after taking office. I am glad that the hon. Member for Watford (Mr. Garel-Jones) agrees with me. I am sure that he will agree with me all along the line. The third day after their election, one could not blame the Government for price increases. A month after the election one could not say that they were directly responsible for price increases as those increases might have been in the pipeline. Perhaps a fair-minded person might say that the Government increased prices in their first Budget but that, nevertheless, some price increases were still working their way through and that those were no fault of the Government.
Just before Christmas I asked the Minister whether, as she was sure that the vast majority of price increases were in the pipeline—she was certain about that—she would be able to tell us when the pipeline would be empty. When will the rate go down? When will price increases cease to be the fault of the previous Labour Administration? There has been a rapid increase in interest rates and VAT has been increased, despite the Conservatives' election promises. Control on prices has been released, and I challenge the Minister to tell us tonight whether the pipeline is empty.
There has been a useful gestation period of nine months since the Government took office and the pipeline must be empty now. The Government's excuse is hollow and the Minister must admit that the Government are directly responsible for price inflation. However, she is doing nothing about it. It is time for her to change her tune and to admit responsibility for price increases. If she does not admit it, my charge that the Government have adopted the language of newspeak will become a graver charge, to the effect that the Government have adopted the policy of the late Dr. Goebbels and his insidious propaganda.

Mr. Ioan Evans: The Bill has had an interesting passage through the House. Hon. Members will recall that on Second Reading the Secretary of State made a two-minute speech and then sat down. He had great difficulty in finding anything


to justify the Bill and he could find nothing to justify the abolition of the Price Commission. One might have thought that he would make amends and that he would be here to listen to the proceedings. However, he has gone to Tokyo. I quite understand that Ministers must travel abroad, but one would have thought that arrangements could be made that consider the will of the House. There was a hiccup because the Secretary of State made such a short speech in moving the Second Reading.
We are discussing the Government's attitude to prices. Clause 1 abolishes the Price Commission. However, there has been an argument between different Departments about whether the Treasury should answer questions or whether the Department of Trade, the Ministry of Agriculture, Fisheries and Food or the Department of Employment should answer them. Under the previous Labour Government there was a Department of Prices and Consumer Protection. The Secretary of State is trying to duck responsibility for prices. When we go to the Table Office, we experience difficulty. The Government did not put their proposals to the electorate. They did not tell the electorate that they would abolish the Price Commission. In their manifesto they said only that they would review the Price Commission. However, to review something is not to abolish it. Later in the week we shall review nuclear weapons, but that does not mean that we shall abolish them. There is a great difference between reviewing a body and abolishing it.
The Government said in their manifesto that they would review the Price Commission. However, there was no mention of a review in the Queen's Speech. There might have been some sense in looking at the working of the Price Commission. It might have made sense to review the Price Commission and to see whether it should be strengthened or whether its powers should be changed. However, during the debate on the Queen's Speech the Prime Minister said, as an aside and without any indication before-hand, that the Government intended to abolish the Price Commission. That is the only policy enuciation about prices that we have heard from the Government.
In Committee we asked who was responsible for prices. The Minister replied

that all Ministers were responsible for prices. Nobody is willing to carry the can or to accept responsibility. That problem faces the House. We are in the first Session of Parliament, and the Conservative Party has been returned with increased numbers.

Mr. Robert Hughes: Where are they now?

Mr. Evans: I cannot blame them for not being here, because it is terrible to have to sit through a debate about prices and to listen to the Government. I forgive them for being in the Tea Room or whatever they are.
The Government were elected on a slogan saying that the rising cost of living was the rising cost of Socialism. One might have though that we had the most Socialist Government ever. However, we have the most reactionary Tory Government who have ever been seen. This Government have nothing to do with Socialism. They completely absorb the economics of Friedman.
The Government get everything wrong. They told us the date of the Budget, but they did not realise that on that day the Archbishop was to be enthroned. They made a mistake. They did not realise. Nobody had told them when the Archbishop was to be enthroned. However, the Prime Minister is now on the road to Canterbury. She will be there and I hope that she will get the Christian interpretation of the parable of the Good Samaritan. The most nauseating statement that I have heard from the Prime Minister was her interpretation that the Good Samaritan could not have done any good without money. What an interpretation! That is the Government's attitude. They have an absolute belief in market forces and are dominated by their monetarist policies.

Mr. Gwilym Roberts: While my hon. Friend is dealing with the parable of the Good Samaritan, will he reflect that if the Good Samaritan had been around at the time of this Government he would have not have had sufficient cash to meet the hotel bills?

Mr. Evans: I shall not pursue that point.
I hope that the Prime Minister will come back and consider the parable of


helping others. This Government's attitude is the opposite to that of the Good Samaritan.
Old-age pensioners and other disadvantaged people in our society have been kidded and conned into voting for the Conservative Party. They thought that this Government would deal with the problem of price increases, and there is now anger in the land about the Government's actions.
It is argued that the Price Commission had no function and fulfilled no purposes. The manufacturers complained that it was doing too much and inhibiting them from putting up prices.
We cannot take all the credit for setting up the Price Commission. It was set up in the days when we had a less reactionary Conservative Government, and the Labour Government kept it in being. It had powers of prenotification. Conservative Members argue that the Price Commission had no real effect on prices; but why, then, do the manufacturers complain?
One result of the Price Commission was that increases were delayed. They had to be examined first. Now there are monthly, almost weekly, increases in prices. The fact that manufacturers, brewers and oil companies had to refer price increases to the Price Commission slowed down the implementation of increases.
Institutions are judged by their results. The Price Commission had been put into cold storage by the Tory Government, but under the Labour Government inflation was coming down from double figures. It came down to single figures. Since the abolition of the Price Commission it is rising month by month. Last month, there must have been a hiccup because the rise was 0·2 per cent. less than previously. Prices are going up, and the rate of inflation is increasing month by month. From all that we know of the proposals in the Tory pipeline, the 17½ per cent. inflation rate could well increase to 20 per cent., despite the removal of the VAT increase from future calculations of the RPI. There was justification for the Price Commission, and we can see the great need for it when we compare what happened during its existence with what is happening now.
Market forces will apparently control the law of supply and demand. They will

be the sole and dominant factor. The Government will not intervene. Everyone is expected to behave himself, to be loyal to the Tory Government and to keep prices down.
We all know what is happening. At a time when we are seeking wage restraint, market forces seem to be allowing manufacturers to do what they want. I do not believe that any Minister has yet condemned one price increase. We have had a multitude of price increases by a whole range of producers, and I do not recall any condemnation by the Government. We are on the way to hyper-inflation.
We are in the middle of a major steel strike, which will affect prices. Hon. Gentlemen cannot say that the strikers are militant and irresponsible when in that industry there has not been a strike for over 50 years. It has taken a Tory Government to bring the steel workers out on strike. In spite of the many price increases, the initial offer to the steel workers was only 2 per cent. Other offers have been made since, which involve productivity deals, but that was the only offer made without strings.
We do not know what effect the steel strike will have on foodstuffs. Consumers are acting responsibly and there has not been a rush to buy canned foods, but if the Government take no action such supplies will be limited in the future. The Government have decided not to act and to let market forces operate, but we know that those forces are not operating properly. The Government have told British Steel that there is no more money and that it cannot have one extra penny. They say that British Steel must settle the dispute. It is all very well to tell the steel workers that, but there are wage increases for the Armed Forces and in the public sector, and they are not told that the money must be found from within the enterprise. The Government are determined on a collision course in the steel industry, which will have a major effect on small businesses and the engineering industry generally. In South Wales it will lead to 12 pit closures, with the resulting serious impact on the coal industry, when we should be producing as much coal as possible. That in turn will affect prices and the economy—and yet the Government remain inactive.
One of the mistakes that the Government made was to end the Department of Prices and Consumer Protection. I believe that the Minister for Consumer Affairs did not support that move and wanted to keep the Department going. The consumer should be represented when the Government are considering prices, but there is now no one to represent the consumer in this Tory Government. That is a step backwards. It is accepted that various sections of the community should be represented in discussions on matters affecting them, but when prices are being considered the consumer is not now represented. In this Government there is no one to do that.
That is why in the past few months we have seen this Government adopt an anti-consumer attitude. We have had a foretaste, through leaks, of what we shall see in the next Budget. In the previous Budget, through taxation, the burden was taken from the wealthiest and, by increasing VAT, placed on those who have to spend money. Reference has been made to the fact that a television set which had a tax of £16 now carries a tax of £30. That is a direct increase by this Government. On a car worth £4,000 VAT alone has risen from £320 to £600.
We have had an increase in the minimum lending rate. We are told now that the MLR may well be reduced in the Budget. Why wait until the Budget? Is that the only piece of good news that we can expect in the Budget? Why not bring the MLR down now?
Owner-occupiers have been hit particularly hard. The Conservatives have always said that they were champions of owner-occupiers. I wonder whether there are many owner-occupiers left who believe that they will get a fair deal from the Tory Government. They have seen the cost of their mortgages increase substantially as the interest rate has risen from about 11 per cent. to 15 per cent. As Government policies work through to local authorities, council house tenants also can expect to face increases.
I do not wish to dwell on the increases in petrol prices, but I must point out that there seemed to be restraint under the previous Government despite the fact that oil prices rocketed. Under a Labour Government, international oil prices increased fourfold, which must have affected

petrol prices in this country, but in those good old days petrol cost between 75p and 80p per gallon. The Conservative Government do not just allow the oil companies to do what they wish and allow market forces to work. Instead, they intervene and put an extra tax of lop per gallon on petrol.
Tremendous profits are being made by the multinational oil companies, but the Government have done nothing about examining those profits and restraining prices. They leave it to market forces and let the oil companies see how much they can get. The only competition that exists on the forecourts of the petrol stations today is the competition to put prices up. Why does not the Minister stop that?
On the question of food prices, reference has been made to the devaluation of the green pound and the need to protect our farmers. This country has been taken for a ride through membership of the EEC. We are paying very heavily to the CAP and our payments mean that food prices have increased substantially. The only benefit the EEC has given is to the Russians, who get cheap butter. I do not know whether that practice has been stopped. There is a lot of talk about stopping the Olympics, but I wonder whether efforts have been made to stop sending cheap butter to Russia. It is certain that British consumers have not received any benefits of cheap butter.
Under previous Governments, we gave a guaranteed price to the farmers, and as a result consumers obtained dairy products far more cheaply than they do at present under the EEC arrangements. We have to buy products within the Community instead of taking the opportunity to buy them from New Zealand. Australia and Argentina. There is now an EEC tariff on such goods and, as a result our housewives suffer.
We are still net contributors to the extent of £1,000 million to the EEC, and that money goes primarily to the agricultural fund. I know that the Government intend to do something about that, but the problem still exists. We have heard a lot of arguments from Conservatives against food subsidies which were introduced by the Labour Government in order to keep butter and cheese prices down. The only difference now is that subsidies go to part-time Bavarian farmers.

Mr. Keith Wickenden: Will the hon. Member remind the House which party was in power when the EEC rules were renegotiated in 1975?

Mr. Evans: The Conservatives took us into Europe and we sought to renegotiate the terms. I agree that some Labour Members thought that the renegotiated terms were good, but others, like myself, did not. At least, there was a division of opinion on this side of the House. The Conservatives were almost unanimous—in fact, I do not remember hearing a single complaint from the Tory Benches about the renegotiated terms—

Mr. Deptuy Speaker (Mr. Richard Crawshaw): Order. I hope that the hon. Member will leave that subject now.

Mr. Evans: I turn now to the question of the nationalised industries. The Gov-

ernment say that they will not intervene in the terrible steel strike. Instead, they sit watching it like petrified rabbits and allow it to continue. They say that they believe in freedom, in market forces and in the laws of supply and demand. It is surprising that when it comes to steel the Government are non-interventionists, but when it comes to gas and electricity prices they are more interventionist than we were. The Labour Government told the gas and electricity industries to restrain their prices, but this Government not only chose to let them have their heads but actually told the chairmen to put the prices even higher. We have a Government who intervene to clobber the consumers of this country, even though they were elected on the promise of defending them. We have a Government who, right along the line, have intervened in order to put up prices.

Mr. Tristan Garel-Jones: I have listened with care to the speeches of both the hon. Member for Aberdare (Mr. Evans) and the hon. Member for Fife, Central (Mr. Hamilton). They both seem to imply that, although the Price Commission did not work, it provided the British people with some psychological comfort. People could sit at home and watch prices rise by 105 per cent. and calmly say "God bless the Price Commission and God bless the right hon. Member for Birmingham, Spark brook (Mr. Hattersley), who is defending our interests in the Cabinet." When prices increased by more than 100 per cent. under the previous Government, I wonder in what vein Labour Members replied to letters from their constituents. Did they say that, although prices had increased by such a large amount, the increases had been made with humanity and caring?
I would find the intervention of the hon. Member for Aberdare more convincing if, instead of giving lists of prices which are rising—we all regret this and hope that they will be restrained—he would suggest an alternative which his party would pursue. Does he suggest that we should continue with another five years of guaranteed rises of 105 per cent.?

Mr. Evans: Obviously, as has been made clear in the debate, world conditions determine prices. We said that when we were in Government and we are prepared to say it in Opposition. But when there was a fourfold increase in the price of oil the Conservative Party did not say that this was going to affect costs in this country. The attitude of the right hon. Lady and her colleagues now on the Front Bench—and indeed of the whole host of Tories when in Opposition—was that every price increase was due to the work of the Labour Government. Will they now admit that everything is due to them, because that is what they should do? But what they are trying to say now is that it is due to other factors, that it is due to the increases in our pipeline. The increase in VAT is due directly to them, the increase in the Budget was due directly to them, the increase in gas and electricity prices was due directly to them. These increases are not in any Socialist pipeline; they are in a Tory pipeline.
Would the hon. Member for Watford (Mr. Garel-Jones) repeat the point he was making in his intervention?

Mr. Garel-Jones: What I was trying to do, perhaps a little arrogantly, was to guide the hon. Member towards suggesting to us what alternative policy is offered by either of the two parties on the Opposition side of the House.

Mr. Evans: Of course, we had an alternative policy, because we were bringing the rate of inflation down from double to single figures. This was due to the fact that we had for many years the support of the trade union movement; its members were prepared to have wage restraint because there was price restraint. This Government say that they have nothing to do with prices. Yet they are deliberately intervening to affect wages. They are deliberately intervening to tell the steel workers that, although the inflation rate has gone up to 17 per cent., they must take an increase of only about 2 per cent., which means that the policy of the Conservative Party is to reduce the living standards of the people.
It is not for me to give the whole host of policies that are the alternative to those of the Government, but we want the Government to abandon the attitude whereby they glibly say that they must not get involved with market forces, that they must allow them to find their own way, that they must just sit there because they have no role to play in restraining prices. I believe that a Government must have a role in restraining prices. I believe that the Labour Government successfully intervened. I believe that the Government are reducing the living standards of the people by attacking the social wage. The parents of youngsters travelling to school have to pay increased bus fares and they have to pay extra for their school meals. The Government are attacking the whole Welfare State concept that we have set up in this country. We believe that we should restore the Welfare State. We believe that we need co-operation in industry, not competition. The Conservative Party are putting forward a whole host of policies that are wrong.
What is indicative of the situation in the House tonight? The hon. Member


for Birmingham, Selly Oak (Mr. Beaumont-Dark), who is the only Tory Member who has had the courage of his electoral commitments, has come into the House to defend the Government. He said that realism will bring down inflation. If that is the case, it will never be brought down by the present Government.

Mr. Donald Dewar: I must say that I admired the comprehensive tour d'horizon to which we have just been treated by my hon. Friend the Member for Aberdare (Mr. Evans). I agreed with almost everything he said and I am not going to repeat it all, which may come as something of a relief to the House.
In my constituency, which is a particularly typical slice of working-class Glasgow, I notice that at the moment prices are yet again becoming a matter of great public anxiety. That may not seem surprising but in a sense it is, because there is a lot of competition; there are a lot of local issues which it might be thought would be in the front of people's minds. My constituency, for example, is in the centre of what the Government have accepted is probably one of the most difficult employment areas in Scotland. We have got the impact of council house sales, and I cannot think of any constituency in Scotland that will be more divided on that issue and where more tension and heat will be generated. So there are a lot of very hot political potatoes about.
But I find, again and again, as I go around that it is the issue of prices that is coming more and more to the forefront of people's minds. I must confess that I find the attempts of the Government and the repeated attempts of Government spokesmen to suggest that in some way we are getting on top of the problem of inflation totally unconvincing. I think it was the right hon. Lady the Minister for Consumer Affairs who said—piped, I might almost say—sotto voce during the speech of my hon. Friend the Member for Aberdeen, North (Mr. Hughes) that we would conquer inflation this month, referring to the fact that there is a 0·2 per cent. drop in the annual rate, from 17·4 per cent. to 17·2 per cent. But, of course, we all know, and it has been hammered out again and again from the Labour Benches, that there is a large

number of international factors and considerations, some of which I fully concede would plague any Government, which will force up prices in this country. But there is also an enormous number of deliberately manufactured policies which will have a very similar effect.
I think that we are entitled to protest about the abolition of the Price Commission and attempt, at least, although it may well be a vain attempt, to do something about it with this particular group of amendments, given the public anxiety and given the deliberate trend of Government policy. Everyone recognises the difficulty of controlling prices. I re-entered the House in April 1978, when the Labour Government had less than a year to run. At that stage inflation was running at an annual rate of about 7·9 per cent.—just under 8 per cent. People constantly came up to me and said "Why do not the Government peg prices totally "It was explained that that was not practicable for a whole variety of reasons. By and large, people were prepared to accept that, but they were prepared to accept it in the context of a Government genuinely trying to do something about an absolutely monumental problem that they could see daily eroding, or at least threatening, their living standards. They could appreciate the difficulties but they could also appreciate the efforts that were being made through mechanisms such as the Price Commission by the Labour Administration.
What makes people particularly angry at the moment is that they have what I think is the justified feeling that the Conservative Government are not making any effort at all but are doing the exact opposite—standing on the sidelines and cheering on the offenders. We have a situation in which Government policy is deliberately to let prices rip in a large number of sectors, and, when they try to say that they are holding down inflation, that is seen by a large number of people in my constituency, and, I am sure, throughout the country, as nothing but hypocrisy. That is an extremely dangerous situation

Mr. John Home Robertson: I should be very interested to know whether people in Garscadden are similar to people in East Lothian and Berwick shire in being


able vividly to recall a television programme in which the right hon. Lady took part, in the run-up to the general election. She had a shopping basket and she explained how cheap everything would be in due course, when she managed to get things under control. Would my hon. Friend agree that both our constituencies have been cheated in this matter?

Mr. Dewar: I certainly think that the results of the first nine months of Conservative Government might well leave people with a feeling that they had been taken for a ride and that they had been conned by the campaign at the last general election. I certainly have not seen so much of the right hon. Lady's shopping basket recently, and I look forward to the next time we see it. Perhaps we should ask her as a publicity exercise to produce it again and to go through exactly the items that she had in it last time, because that would be a nice, simple way of telling the people in the country what has been going on in the past nine months. I am sure that the right hon. Lady is strongly in favour of the widest dissemination of public information.
I accept that the Price Commission did not in itself make a substantial impact directly upon price levels. It is impossible to prove otherwise; it is not something that is open to objective evidence. There has been some discussion, however—I think rightly—about the deterrent effect, and we all have to make up our own minds about that. I think it is fair to say that some of the sound, the fury and the anger about the Price Commission and its existence suggests that it was not quite as ineffective a mechanism as some Conservative Members would have us believe. The deterrent and monitoring effects of the Price Commission were important.
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Fears are sometimes exaggerated. People think that they are being taken for a ride or being "done" when they are not. If they had explained to them the high cost of manufacture, investment and raw materials, they would realise that sometimes a price increase was justified. There is a case for a mechanism like the Price Commission even if only to take just a few key test cases to examine and then to explain and illustrate what had hap-

pened. Such a mechanism would educate the public about the difficulties that many firms have to face and would also have a symbolic, cosmetic effect in showing that efforts were being made by the Government to keep down prices at a time when workers were being asked to keep down inflation by moderating wage demands. How can the Government persuade people to moderate wage demands if, at the same time, they are dismantling the Price Commission and deliberately increasing prices in certain public sector areas which are peculiarly sensitive?
The Tories preach the free market doctrine, but they do not live up to it. Many of the price increases which have to be borne by ordinary working-class families are the result of deliberate Conservative policy and interference.
It is calculated that in Scotland about £73 million will have to be recouped from rent and rates because of the restrictions placed on local authorities by the Government. That means on average an increase of about £1·60 per week for every council tenant in Scotland. The Labour members of the Glasgow district council have successfully fought a brave rearguard action to hold rent increases to 20 per cent.
There are many factors which affect mortgages—international money movements, international rates and international comparisons. All these factors exert pressure on mortgage rates. Pressure on the minimum lending rate perhaps cannot be resisted, but there are many actions which could have been taken by the Government—and were not—to relieve pressure on the mortgage rate.
It is extraordinary that the apostles of the free market economy should not allow management to take its own decisions but should tell industry that increases to match the rate of inflation plus 10 per cent. should be made this year and next year and probably for long after. The Price Commission is one of the few organs that is seen to be struggling with the erosion of living standards and rising prices. If the Government dismantle the Price Commission, they cannot be seen to have any credibility.
We have heard from the Chief Secretary to the Treasury gloomy prognostications for the future. There will be more and more pressure on living standards as


the months go by. I cannot see that the destruction of the Price Commission is anything more than a sop to preconceived notions of what is in the best interests of the Government. I do not worry about what is in their best interests, but I do worry about what is in the best interests of the country.
I like living in a country that has consensus politics. Since the war we have had cohesive, civilised politics, but now we are beginning to see a breakdown in that pattern. In the prejudice which is being shown by the dismantling of the Price Commission and by the increase in gas prices and local authority rents, we see the seeds of bitterness being sown.
I know that the Government will not change their mind tonight—that would be asking for a miracle, and miracles are rare in the House of Commons. But I hope that they will carefully consider the course on which they have embarked and also consider whether they should not be more mindful of the needs, aspirations and feelings of ordinary folk before they bash on, bull-headed and unashamed, on their prejudice course.

Mr. Campbell-Savours: I join my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) in his reflections on the need for equality of sacrifice. If the workers are to be required to make sacrifices on pay, it is for the Government to insist that manufacturers should be part of the general consensus referred to by my hon. Friend.
Behind the Bill is a clear assumption that the Price Commission did not work. I do not accept that. I believe that in part it was successful. Even if it did not immediately affect a great number of price increases, it acted as a major deterrent. It worked sufficiently well for the right hon. Member for Cambridge shire (Mr. Pym) to say on "Panorama" on 23 April last year:
There is no commitment whatsoever to abolish the Price Commission.
Yet within 22 days—11 days after the election—the Secretary of State for Trade said that there was no place for the Price Commission.
When I was elected to the House I was told that I must be careful what I said about Conservative Members, but it seems to me that prior to the election someone set out deliberately to mislead

the British people and, in doing so, was able to influence the Conservative victory. I was brought up to believe that in every part of my endeavour, day by day, I should try to be honest. The statement by the right hon. Member for Cambridge shire was grossly dishonest and misleading.
As a further measure of the interventionist success of the operation of the Price Commission, I should like to quote what was said by the Director General of the CBI last year. In a report on price controls and the Price Commission, he said:
The activities of the present Price Commission have caused particular concern. Indeed, in my experience, there are very few issues which have caused more worry.
It must have been having some success and effect. I should like to measure the success of the Commission's operations under the Conservatives, who, despite what has been said during the debate, introduced the Price Commission in 1974. The right hon. Lady, who has spent much of the debate smiling at our references to the Price Commission and the need for it, was one of those who voted for the Price Commission to be set up in 1973. The campaign guide of the Conservative Party in 1974 quoted the chairman of the Price Commission as saying:
The consumer had been saved some £316 million at trade prices.
The chairman, who had referred to a fall in the increase in the retail price index, was also quoted as saying:
As a result of seasonal changes as well as control of price, increases by Category I companies, over which control was strongest, were particularly small.
Those are remarks about the operation of the Price Commission, not under a Labour Administration but under a Conservative Administration. It can be seen that the Commission had a vitally important part to play in the fight against inflation under a previous Government, yet repeatedly during the Committee stage the right hon. Lady and her hon. Friend were trying to tell us that the Commission was ineffective.
It is interesting to compare the origins of the Price Commission, which was set up by a former Conservative Administration between 1970 and 1974, and the climate that surrounds the closing down of the operations of the Commission


under this Government. The Conservative Government of 1970–74 saw a climb in bank rate, rising unemployment, a fall in the number of job vacancies nationally, low growth and a massively deteriorating deficit on the balance of payments. All that is exactly the same today. There was also a drop in the purchasing power of the pound. Between the election in 1970 and the decision to introduce counter-inflation proposals in 1972, there was a reduction from 100p to 85½p.
A very similar reduction has occurred under this Government, from 100p last May to 90·2p now. The same conditions exist over the levels of income tax. The Government who came to office in 1970 reduced income tax by 2½p. This Government reduced it by 3p and fuelled the fires of inflation.
All the circumstances surrounding the introduction of the Price Commission in 1972 remain exactly the same today. If they were similar at that time, one has to ask why the Conservative Government now have the objective of phasing out the vitally important powers that they thought were so important then. There is a reason. It is very important. The whole Conservative Party has changed.
At that time, the right hon. Member for Sidcup (Mr. Heath) had a particular view and pursued that view with determination. In many cases, I am informed, although I was not in the House at the time, the right hon. Gentleman suffered much criticism from his own Back Benches. The present Prime Minister pursues a totally different form of policy and apparently carries the whole support of Conservative Members. The right hon. Lady does not accept the need for consensus politics to which my hon. Friend the Member for Glasgow, Garscadden referred. She does not understand the need to pursue, in conjunction with the trade unions, a policy of consent in pay bargaining and prices. The right hon. Member for Sidcup treated those factors as crucially important in his fight against inflation. The right hon. Lady forges on. As she does so, people, not only on the Opposition Benches but throughout the country, recognise increasingly that this policy invites disaster.
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During the debate, both here and in Committee, it has become obvious that

Conservative Members are unwilling to accept that the Price Commission played an important role by dampening down the effects of rising prices. The prenotification factor acted as a considerable deterrent. Many companies, despite what has been said in this debate, did not apply for price increases. They knew that they would not get approval from the Price Commission. As a result of the phasing out of these powers, many smaller companies, as I spent some time in Committee explaining, will suffer almost as much as general consumers.
The Government should admit to their objective. I believe that they have made a clear estimate and set clear objectives for the future. I do not believe that they are worried, from a political point of view, about the rise in prices this year. They have calculated that if they can manage a five-year term in office, the first two or three years—that is their calculation of suffering—will have been forgotten by the time of the next general election. That is the belief of myself and many of my hon. Friends. I wish, however, that the Government would come clean.
It might be interesting to state what Labour would have done if we had won the election. From my conversations, it is clear what we would have done. We would have retained and strengthened the powers of the Price Commission. We would have added to the resources in the hands of the Director General of Fair Trading to investigate. We would have produced, like this Government, new competition legislation. Our policy would have had a major effect on the future of price rises inasmuch as we would have contained inflation effectively.
I should also perhaps admit that I believe that a major row would have occurred on the Labour Benches about the whole question of incomes policy. I do not believe that the principle of price restraint can be separated from the need for an incomes policy.
I believe that the Minister should hang on to the prenotification powers. If she is not willing to consider the wholesale use of prenotification powers, she should certainly consider their use in selected areas, as my hon. Friend the Member for Norwood (Mr. Fraser) so adequately demonstrated in Committee. The public demand that whatever machinery is


available for restraining prices should provide for a speedy system that can operate quickly in the event of the public interest being affronted.
This Bill is an attempt to introduce delaying mechanisms that will force on to the Director General of Fair Trading and later the Monopolies and Mergers Commission the responsibility for functions that they will undertake over a long period and during periods of great public anxiety—functions that were previously carried out far more rapidly by the Price Commission.
Important powers to intervene in profiteering—powers which existed under the old Price Commission—are removed by the Bill. That is deplorable.

Mr. Gwilym Roberts: Does my hon. Friend agree that such decisions should be taken not by the Director General of Fair Trading but by the Government?

Mr. Campbell-Savours: If the Bill were framed in the right way and if we retained the powers of the Price Commission, that suggestion would not have to be made.
If we are to deal with the problems of profiteering, we should consider the position of people who, as a result of shortages of foodstuffs, find that when prices rise there is no machinery available to move in fast with an inquiry to ensure that suitable reductions are made.
In Cumbria, following the nationalisation of the State brewery some years ago, private companies were able to buy up the major public houses and overnight raise beer and other drinks prices by as much as 30 per cent. simply because of a change of ownership. It is a pity that at that time, in 1971, the powers of the Price Commission were not available. If they had existed, my constituents would have been better off. The public demand a quick system. The Price Commission provided such a system.
A document was sent to me and other hon. Members this morning by the Retail Consortium. I have no doubt that representatives of that organisation are now within the confines of the House. Taken with schedule 8 to the Fair Trading Act 1973, the Bill enable Ministers to refer price increases to the Direc-

tor General of Fair Trading, after overcoming a number of hurdles. The Minister should say what she feels about the Retail Consortium's comments. It states:
We consider that this negates the effects of abolishing the Price Commission and inded the powers given to the Secretary of State in many ways go beyond the powers of the Price Commission particularly as Orders, made under the Bill, will have no time limit.
It is said that the reason for including such powers in the Bill is to deal with a situation where neither a monopoly or merger exists within the meaning of the Fair Trading Act 1973, but nevertheless, some of the consequences of a monopoly or merger are likely to subsist after an anti-competitive practice has been controlled, if so, we consider that the situation should be controlled either by separate legislation or by amendment to existing legislation.
The Retail Consortium is saying that despite the Bill's intention being to phase out the powers of a body which we would like to be retained, there are in the Bill, taken with schedule 8 to the Fair-Trading Act, sufficient powers for the Minister to operate as if there were some form of price control machinery. I should like to hear the Minister's comments on that, because if that is correct we shall be happy that at least something is coming from this legislation which fulfils our objectives.

Mr. Robert Maclennan: The Conservative Party used to pride itself on being a pragmatic party that viewed economic events as they unfolded and responded to them, that eschewed ideological convictions and recommended that that was the way to handle the economic problems. The only type of pragmatism that the Conservative Party in Government is demonstrating in regard to inflation is a willingness to depart from the undertakings which were given in Opposition and promises made during the election campaign to the effect that the Price Commission would be left intact.
It is fair to say that the Conservative Party sought at every stage when in Opposition to weaken the powers of the Price Commission and to criticise its operations. At no time until the Conservatives gained the responsibility of office did they frankly admit that their purpose was not merely to limit the powers of the Price Commission but to wrap it up


and deny themselves the opportunity to intervene in order to deal with unacceptable price increases.
The debate stems from new clause 3 and a number of associated amendments. Their purpose is to put into the Government's hands some power to intervene when a price increase is demonstrably contrary to the public interest. The right hon. Member for Gloucester (Mrs. Oppenheim), who is called the Minister for Consumer Affairs, may think that she can wash her hands of all responsibility for prices and that she can convince the public that she has no means of controlling unacceptable price increases, even when they are demonstrably unjustified, but she cannot in an Act divest her Government of responsibility for unacceptable price increases.
The public will realise that by her Pilate-like act the right hon. Lady is subscribing merely to dogma. The responsibility for unacceptable price increases will lie with her none the less, because under clause 13 she has attempted to divest herself of any powers to deal with the situation. Clause 13 is strange. It purports to give the Secretary of State the power to investigate prices while leaving him powerless to do anything about prices.
What does the right hon. Lady think will be the consequence of clause 13 if, following a reference, the Director General reports that a price increase is wholly unjustified? What does she propose to do about that? There is nothing that she can do except to say that it is regrettable and unacceptable. The right hon. Lady will have no power to intervene.
It is unlikely that the Government will refer any questions to the Director General for investigation, because when we were in Government the Conservatives objected to all our references on the grounds that they were unjustified, that no prima facie case had been made out and that companies should not be judged guilty before being proved guilty. References to the Price Commission were described repeatedly by the Conservatives as efforts to pin guilt on companies before a prima facie case had been made out.
If that is the philosophy of today's Government, few references will be made under clause 13 to the Director General. It is questionable whether the right hon.

Lady has taken powers that are capable of being used even to refer a price increase to the Director General for investigation. The matters which are capable of being referred are described as being only those of "major public concern".
7.30 pm
Who is to say what is of major public concern? How will the right hon. Lady measure how this concern is to be expressed if she is challenged in the courts? Will she be able to prove that such matters are of major public concern? She neither intends to use nor could she use her powers. They are a fig-leaf and a disgrace to the Bill, which in some aspects of competition policy does have meaning and may have some effect. The right hon. Lady might as well have excluded clause 13 from the Bill entirely in relation to the investigation of prices. The clause is purposeless and otiose.
We in Opposition approach these matters with more pragmatism than the right hon. Lady and her colleagues. We would like to see her, even now, repent, recant and recognise that in the lifetime of this Government she may very well regret having divested herself of the power to do anything about price increases that are recognised by the public as being unjustified.
We take no pleasure in demonstrating to the right hon. Lady that she has been wrong. We shall take no pleasure if the Government find it necessary to come back to the House in the lifetime of this Parliament to take up again the powers that they so wantonly threw away. We shall take no pleasure in indicating that the difficulties are difficulties of their own creation.
Even now there is a chance for the right hon. Lady to recognise that she could retain the power to stop unjustified price increases. She should not stand on the sidelines and pin the blame upon those in industry and commerce who are not acting in the public interest. The Government—and she as Minister for Consumer Affairs—have a responsibility to protect the public interest, to prevent abuses of the market and to improve a situation—increasingly common as British industry becomes more concentrated—where the market is unable to operate to protect the consumer.
These matters will not always fall within the scrutiny of the Director General of Fair Trading under the competition provisions of the Bill. There will be times when it will not be possible to demonstrate beyond peradventure that there has been an abuse of the market even when it is quite clear, after objective investigation, against the broad criteria of the public interest, that a particular increase is unjustified. It will not be possible in those circumstances to intervene to stop such an increase.
The right hon. Lady has been doctrinaire in her approach to her responsibilities. It is a matter of profound regret to all of us that the Conservative Party is departing from its traditional approach to the management of the economy and from the recognition that one cannot, by laying down a series of carefully constructed rules and by establishing a price code similar to that operated by the last Conservative Government, catch all situations within the net.
The right hon. Lady may now dissent from the policy of the previous Conservative Government, but she was a member of the Conservative Party in this House at the time and supported that Government. We were able to modify the approach to price control in a way that I believe was wholly sensible and well adapted to the differing conditions of the various parts of British industry which need to be kept under scrutiny.
The right hon. Lady has abandoned the price code and now she abandons even the possibility of intervention. New clause 3 is not perfectly constructed. I could make some improvements to it if f were given the opportunity to introduce them. The purpose of new clause 3 is clear. It seeks to arm the Government for the battle against inflation and against unjustifiable price increases. That is a battle that the country expects the Government to join. Unless the Government win that battle, they will be consigned to a very long period in Opposition. I would welcome that but not the cost that would have to be paid.

Mrs. Sally Oppenheim: Anyone who had come into the House during the last two and a half hours might have been forgiven for being surprised at learning that the House had been debating new clause 3 and amendments Nos. 23, 33,

34, 40, 48, 49 and 50. Until we heard the speech of the hon. Member for Caithness and Sutherland (Mr. Maclennan), I do not recall anybody referring to any of those amendments. As far as I can remember, they were not even propounded by the right hon. Member for Lanarkshire, North (Mr. Smith).

Mr. John Smith: Indeed they were. The right hon. Lady should listen.

Mrs. Oppenheim: All right, so they were propounded.
Some Labour Members have expressed concern about the effects of the present levels of inflation on the most vulnerable people in our community. I do not question the sincerity of those hon. Members. I share their concern. The levels of inflation that we have experienced in this country over the last five and a half years have had a devastating effect socially and economically. However, they did not start nine months ago. They started over five and a half years ago, and nobody is more aware than myself and the Government that this great evil must be overcome. That is why we are sticking relentlessly to realistic economic policies, however unpopular they may be in the short term. We are determined to overcome this evil.
Whereas I accept the sincerity of the concern expressed by some hon. Members in this debate, I do not accept the hypocrisy of some other hon. Members who have criticised this Government for the present levels of inflation as if inflation had never happened before. The previous Labour Government presided over rates of inflation as high as—or higher than—present levels, not for a mere seven or eight months but for nearly two years during their period in office.
The right hon. Member for Lanarkshire, North criticised the fact that inflation has risen during each of the seven months since the general election, but it went down last month. Under his Government it went up—with one exception—not for the first seven months but for the first 23 months when his Government were in office. Anyone who had walked in in the middle of this debate could also have been forgiven for thinking that he had arrived at some kind of audition for a second-rate repertory theatre company. Hon. Members who have taken part have been long on drama and short on credibility.

Mr. Robert Hughes: rose—

Mrs. Oppenheim: No.

Mr. Hughes: rose—

Mr. Deputy Speaker: Order. The right hon. Lady has said that she is not giving way.

Mrs. Oppenheim: There were rate increases and rent increases. Interest rates rose. None of these factors could be controlled by the Price Commission. Where were Labour Members when all these increases were taking place when the Labour Government were in office?
The right hon. Member for Lanarkshire, North talked about school meal increases. Where was he when school meal charges increased by over 100 per cent. under the Labour Government? He forgot to mention that the recent increase introduced by the Conservative Government was planned and approved by the Labour Government before they left office.

Mr. Robert Hughes: In the early part of the right hon. Lady's speech she said that prices increased for the first 23 months of the life of the previous Labour Government and that it is unfair for the Opposition to criticise the Conservative Government as they have been in office for only seven months. That is fair enough, but how long are prices to continue to rise? Is the right hon. Lady able to tell us when they will stop rising and begin to go down?

Mrs. Oppenheim: I shall let the hon. Gentleman know when they will stop rising. I wish that the answer were "In a very few months".
Labour Members continue to shed their crocodile tears. Where were their tears when prices rose by 110 per cent. when the Labour Government were in office? Where were their tears about the Common Market when food prices increased by over 120 per cent. during the term of office of the Labour Government?
What was the Labour Government's solution for the inflation that they let loose upon Britain? It was to introduce a succession of so-called prices policies, all of which were introduced with loud trumpetings to the effect "Here at last is the answer to price inflation." All their policies had three things in common—

first, they were designed specifically to delude and deceive consumers; secondly, they were expensive; and, thirdly, they failed. They all failed to do anything more than marginally halt the rising rate of inflation in the short term.
I shall remind the House of some of the Labour Government's policies. They started with food subsidies and associated price controls. The subsidies and controls cost nearly £3,000 million, most of which went to the better off. They were phased out when the money and the credit ran out, which is what I said would happen all along. At their very peak, and for a short period only, they restrained the retail price index by about 1½ per cent.

Mr. Gwilym Roberts: rose—

Mrs. Oppenheim: No. We moved on to Shirley's shopping basket. The basket was one-third empty a year after she had filled it. That was followed by the selective price check scheme, which cost £1½ million. It did not cause even a hiccup in the retail price index. The scheme depended on some lines in some shops. For example, any line in biscuits might be held for a specific period. When the shopper checked out at the supermarket, he or she asked the checkout girl "Is it digestive biscuits or the custard creams that are in the scheme?" There was no other way of knowing which line was being held. As I have said, the scheme cost £1½million.
Those schemes and policies were followed by the Price Commission Act 1977, to which I shall refer in greater detail. Meanwhile, behind the cruelly misleading facade of the so-called prices policy, the Government were stoking the fires of inflation through their economic policies and their spending and borrowing until the IMF stopped them. Fortunately, the fund stopped their borrowing and their increasing of the money supply. That left us with unpaid bills to pick up and a rising rate of inflation. Those were inevitably the consequences of the Labour Government's disastrous policies. They left us, too, with the appalling economic inheritance with which we are now grappling.
Now those who were responsible for those disastrous policies, the right hon. Member for Lanarkshire, North and the hon. Member for Norwood (Mr. Fraser)


were members of the Labour Government. Those responsible for those disastrous policies are presuming to tell us what to do through the new clause and the amendments. They want us to perpetuate the failed policies that they pursued. By introducing new clause 3 they want us to go even further. We do not need any lessons from them.

Mr. John Smith: rose—

Mrs. Oppenheim: The only lesson to learn from failure is what not to do.

Mr. John Smith: rose—

Mts. Oppenheim: The Labour Party has instituted a commission of inquiry. It is sitting to decide why the Labour Government lost the general election. I shall tell Labour Members why they lost the election. The answer lies in their failed prices policies. We do not want any more of their controls at work.

Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. The right hon. Lady began her speech by criticising all occupants of the Chair during the debate for allowing speeches that she said were not in order and had nothing to do with the amendments and the new clause. Is it right that she should introduce a matter that plainly has nothing to do with the Price Commission?

Mr. Deputy Speaker: Hon. Members have been going wide of the amendments and new clause during the debate. That may be allowed to happen as long as they return to the subject after a brief spell in the outlying area. The Chair does not wish to intervene. This is probably one of the most important series of amendments that the Opposition are advancing. The right hon. Lady is seeking to answer some of the arguments that were advanced.

Mrs. Oppenheim: We are rejecting Labour's price controls and the Price Commission, which failed and which were damaging, futile and extremely expensive. Such price controls do not work and cannot work. At best, they create short-term illusions. The reality is all the harsher when it inevitably comes through. At worst, they can do great harm.
There are some Labour Members who sincerely believe that price controls will work. There are not many of them any

more. However, I say to those who still have that belief that if prices are frozen at a time of rising costs for producers, either the goods will not be produced or the producer will go out of business. The consequence will be less choice for consumers, fewer jobs and ultimately higher prices. If prices are frozen at a time when goods are in short supply, that will lead only to goods disappearing from the shelves.

Mr. Robert Hughes: rose—

Mrs. Oppenheim: It is impossible to defy the law of supply and demand and to legislate it away.

Mr. Gwilym Roberts: rose—

Mrs. Oppenheim: No. I have already given way twice.

Mr. John Smith: The right hon. Lady is giving us a lecture about supply and demand. Will she tell us how the Government are assisting the fight against rising prices by adding 10 per cent. on top of the inflation rate to gas prices? That has nothing to do with the previous Labour Government. It has nothing to do with supply and demand. It is a deliberate Government decision to increase prices. What has that to do with the fight against inflation?

Mrs. Oppenheim: I shall be coming to that shortly.
New clause 3 provides more draconian powers by far than those that exist in the Price Commission Act 1977. The order-making power is so wide that it is difficult to envisage the finite effects of the new clause. As the Americans would say in the vernacular, the powers go out of sight.
The new clause extends far beyond the items covered in the Price Commission Act. It is not clear whether the powers would have to be used following an investigation. It is likely that they could be used without any investigation. No time limits are sought for the period of control. No limit is set over what could be controlled, nor over the extent of the controls. It represents a wider power of delegated legislation than anything hitherto introduced. Even if the principle behind the new clause were not unacceptable, the extent of its powers would make its acceptance impossible.
Under the new clause, the Secretary of


State could make orders more onerous than those recommended by the Director General. Responsibility for wielding such powers would be in the hands of one man and not a commission. They would be vested in one man who would not even have staff to carry out the task. It is clearly a preposterous proposal.
There are price control powers linked to the Bill in relation to the adverse effects findings following a Monopolies and Mergers Commission investigation of an uncompetitive practice. That is what the Retail Consortium was complaining about. Those circumstances are already provided for in fair trading legislation. The power proposed in the new clause would serve no more useful purpose than the complex and futile price controls of the Labour Government. It would do even more harm as the powers that it proposes are even more sweeping.
The amendments that the Opposition have tabled represent an attempt to preserve the Commission together with the prices legislation under which it has been operating. Is that any sort of answer to inflation? As we have shown repeatedly, and as the former Secretary of State for Prices and Consumer Protection acknowledges, that policy had a minuscule effect on the retail price index. It intervened in fewer than 1 per cent. of the cases prenotified, and in the overwhelming majority of those interventions the full price increase was granted either at the beginning or during the early stages of the investigation.
Is that really the institution that the right hon. Member for Lanarkshire, North has described as important to containing inflation? Are Opposition Members seriously claiming that such an institution has any relevant part to play in containing inflation? Do they really believe that it merited the expenditure of £7½ mllion per year?
It is true that that institution produced one or two interesting reports in areas of limited competition as a result of action taken. The action that could be taken on uncompetitive practices by the Office of Fair Trading and the Monopolies and Mergers Commission under the Bill would be pursued in far greater depth than was possible under the Price Commission. As a result of the Bill, the powers will be there to act in those cases.

In any number of cases where the Price Commission reported distortions of competition, there were no powers to do anything about it. The previous Secretary of State for Prices and Consumer Protection referred only one such case to the Monopolies and Mergers Commission. We have replaced the only useful role of the Price Commission with a stronger and more comprehensive power to deal with anti-competitive practices.
During the course of the debate, a number of Opposition Members have postulated—as they have done before—that prenotification was a deterrent and that companies were afraid to prenotify price increases because they were afraid of an investigation. As a number of hon. Members have acknowledged, it is impossible to measure exactly what happened and the exact effect of prenotification. However, they have levelled the charge that when we abolished prenotification we opened the floodgates for price increases.
There are two yardsticks that give a clear idea of what happened. They do not tell the whole story, but they tell a great deal. I am speaking of the input and output indices. Over the past 12 months, the raw material price index has risen by nearly 26 per cent. Over the six months following the abolition of prenotification and price controls, output prices have risen at a rate of about 14 per cent., barely half the level of raw material price increases. What do we find over that period when the floodgates were supposed to be opened? To a great extent manufacturers have been absorbing these increases without passing them on in increased prices. They have been doing so without the help of prenotification or price controls.
In a similar period when there was prenotification and price controls—the year to the end of November 1977—raw material prices rose by 1·6 per cent. only, but six months later output prices were rising by almost eight times as much. I submit that that evidence shows that prenotification has no effect on the level of increases in manufacturers' prices but that competition does. It was competitive pressures that forced manufacturers to keep down the level of their price increases to almost half of that of the raw material increases. They are not the only factors in cost, but I am speaking of


manufacturers' prices only because in 1978 the previous Labour Government abolished across-the-board profit margin controls for distributors.
A number of hon. Members, especially the right hon. Member for Lanarkshire, North, have asked questions about energy prices. The right hon. Gentleman and other hon. Members spoke about gas prices. I note the right hon. Gentleman's remarks.
Specific questions about specific details of the gas price proposal, to which I think he was referring, are not for me but for the Secretary of State for Energy."—[Official Report, 14 March 1977; Vol. 928, c. 3.]

Mr. John Smith: Ha, ha!

Mrs. Oppenheim: That is the reaction for which I wished. Those were not my words but the words of the right hon. Member for Birmingham, Spark brook (Mr. Hattersley), during Question Time on 14 March 1977, when he was asked about the previous Government's gas price levy. Unlike the right hon. Gentleman, I am prepared to respond.
Of course, the proposed increases in gas prices are large. Nobody likes increasing prices, especially in an area of family expenditure that is already sensitive. I emphasise that the increases are being phased in two stages this year and, subsequently, over the next two years.
If we are to have a responsible, fair and rational strategy for energy conservation—we believe that it is both essential and overdue—we must recognise that to continue the current highly uneconomic pricing of gas could lead only to eventual shortages, rationing and higher prices that would be worse, in the end, for consumers.
We are burning our gas resources dangerously fast. When they are gone, the new gas that we shall need from the North Sea will cost ye or six times more than the present gas. It would be irresponsible to consumers to allow the position to continue.
What the Government are doing is slowing down the rate at which prices would rise in a free market. If that market were entirely free, gas prices would be moving higher and faster because oil prices, to which they are linked, have risen by 100 per cent. over the past 12 months.

Mr. Ioan Evans: rose—

Mrs. Oppenheim: No, I will not give way. I am answering a matter raised by the right hon. Member for Lanarkshire, North. Hon. Members are right to express concern about the effects of the increases on the poor. I assure the House that urgent consideration is being given lo possible ways of helping the poorest consumers to meet rising energy costs.
I can understand the concern among hon. Members on both sides of the House about the use of the extra profits that would be made by the British Gas Corporation. They wish to know that the profits would be used for the common good. Much of the extra profits would be needed for new, more expensive, supplies of gas. The rest would go to the Exchequer to reduce the public sector borrowing requirement. It is the size of the public sector borrowing requirement that determines the amount of future Government expenditure, the rates of inflation and the interest rates that Opposition Members complain about so bitterly. We shall be taking part of the profits into the Exchequer to help everyone, and part will go for investment in the Gas Corporation.
If we are to defeat inflation, we can do so only by facing reality and not by dodging difficult decisions or by attempting to disguise our energy problems. They have existed for a long time and were persistently ignored by the previous Government.

Mr. Maclennan: rose—

Mrs. Oppenheim: I shall not give way. I wish to speak about electricity prices.

Mr. Maclennan: rose—

Mrs. Oppenheim: No, I wish to continue.

Mr. Maclennan: rose—

Mr. Deputy Speaker: Order. If the right hon. Lady does not wish to give way, the hon. Gentleman must resume his seat

Mrs. Oppenheim: I wish to discuss electricity prices because Opposition hon. Members mentioned them. They must have forgotten that electricity prices rose, on average, by 33 per cent. per year under the previous Government. Why are they


now beating their breasts about electricity prices? They have the same double standards about electricity prices as they have about anything else.
We had confirmation of the view that we were witnessing some sort of audition in the theatre. We had a deus ex machina. We had the right hon. Member for Swansea, West (Mr. Williams) dashing in to make an accusation about a letter that I was supposed to have written—which I hope he will produce—and then dashing out again, never to appear in the debate again.
8 pm
We are also discussing Opposition amendment No. 23—

Mr. Maclennan: Perhaps the right hon. Lady will go back to gas prices. Does her statement that the extra money will be used to reduce the public sector borrowing requirement mean that she is categorically rejecting the proposals that have been put to her by the chairmen of the nationalised industries' consumer councils that some of that money should be used for the benefit of poorer consumers? She has specifically not given that impression.

Mrs. Oppenheim: Had the hon. Gentleman listened, he would have heard me say that part of the money will go back to the Exchequer to reduce the public sector borrowing requirement. He would also have heard me say that urgent consideration is being given to what help can be provided for the poorest consumers. That must come out of public funds. Therefore, I would have thought that the answer to that question was self-evident.
During the debate, Labour Members have tried to show that they have some kind of monopoly of concern about prices and that they have the solutions. They have neither. We are just as concerned about prices as they are, but our approach differs from theirs in three fundamental ways. It is honest, realistic and likely to succeed. We believe in tackling the root causes of inflation, in preventing it from happening. We do not believe in trying to fiddle and hide temporarily the short-term effects of inflation as the previous Government did over and over again.
In rejecting the new clause and amendments, we are rejecting the damaging, ex-

pensive and futile policies of the previous Government which proved so disastrous. Of course, we do not claim, and have never claimed, that competition alone can overcome inflation. What we do claim, and what I have said repeatedly, is that the strengthening of competition, of which this Bill is the first step, together with the realistic economic policies that we are pursuing, will provide the most effective long-term solution and will benefit consumers most in the end.
Therefore, not only do I reject the new clause and the amendments but I deplore the motivation behind them, which, once again, is to try to mislead the people into thinking that these solutions can work. They never have, they never will, and they never can. I urge the House to reject them.

Mr. John Fraser: The Minister has treated us to a history lesson. She went through the period of the Labour Government and made a good speech. It ought to have been a good speech, because she has rehearsed it so often. We hear very little else when she answers questions or when she makes contributions in Committee.
However, when we try to get some indication from the right hon. Lady of her policy as Minister for Consumer Affairs, we get nothing. That is perhaps not entirely true, because what we had from her today was a passionate defence of an increase in the price of gas by 10 per cent. above the rate of inflation. But that was the only bit of light that was let into the Government's policy against inflation.
The right hon. Lady might have told us whether she had consultations with the chairmen of the energy consumer councils before the gas price increase was announced. Perhaps she can tell us whether she was consulted by the Secretary of State for Energy about the gas and electricity price increases. She might have told us whether she made any contribution to the debate inside the Government about these matters, and whether she urged the adoption of a rebate scheme similar to the one which the Conservative Administration has only just abolished. We had no indication on those matters at all. As usual, we had a tirade from the right hon. Lady but no indication whatever of the way in which she proposes to proceed in the future with regard to the battle against inflation.
I was rather complimented by the criticism of new clause 3, which I drafted. I think that it has done me some good. The amendments offer a choice. The right hon. Lady can have new clause 3, which toughens up the absolute sham of clause 13, or she can have the provisions relating to the Price Commission that are at present on the statute book.
The right hon. Lady is fond of criticising the Price Commission and is fond of saying that price control by itself will not conquer inflation. I agree that the causes of inflation are complex and difficult to contend with. It does a Government no credit at all to try to make light of them. We never tried to make light of them. But the existence of price control powers and a Price Commission at least shows that the Government are setting out in the right direction and have good intentions which they can pass on to others who have an effect on inflation as well.

Mr. Tebbit: Cosmetic.

Mr. Fraser: The hon. Gentleman says "cosmetic", but the reports of the Price Commission were not cosmetic. Time and time again, the Price Commission investigated areas in which a firm, whether a private firm or a nationalised industry, had a dominant position in the market or where there was a group of companies that had a complex monopoly. Nearly all of the Price Commission's investigations took place in that respect. It investigated the price of tea, where three or four firms control the market. It investigated the price of bread, where two firms control the market. The right hon. Lady murdered that inquiry within days of coming into office. There were many other cases as well where firms had a dominant position in the market and where the Price Commission had a clear effect.
It had the second effect of making every firm responsible for a price increase publicly accountable for that increase. Sometimes the increases were justifiable, sometimes they were unavoidable, but at least there was public confidence that a body was able to look after consumers, whether in respect of private or public price increases. That confidence has been removed. The Price Commission also had the advantage that it could investigate any price increase at all. It did not have to be prenotified.
The right hon. Lady failed to answer the question that was ably put by my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan). What happens if she discovers an unjustifiable price increase? It used to happen with the Price Commission, not only in respect of large matters but also in respect of small matters, where people complained to their trading standards officer or to a consumer organisation and where details of the price increase were forwarded to the Price Commission. Very often, the mere fact that the Price Commission was prepared to start making inquiries led to that price increase being withdrawn. That public accountability and that ability to investigate have disappeared entirely. The right hon. Lady, who is now busy chatting as she usually does during these debates, knows perfectly well that she has no power at all to deal with these matters once the Price Commission or the improvement to clause 13 has disappeared.
I do not claim, and neither did the Labour Government, that the Price Commission and price control powers would by themselves cure inflation. However, they did have the effect of enabling bargains to be entered into with others, be they unions, firms or suppliers, who also had an influence on prices. Therefore, we do not claim that price control by itself will cure inflation. What we do claim is that by abolishing the Price Commission and price control, and by abandoning price investigations that were taking place when the right hon. Lady took office, she will give the green light to price increases, not only by large firms but by small firms. She did it by discarding the recommendation for restraint on the price of biscuits. I do not accuse her of any connections with Sir Hector Laing and the contributions—

Mr. William Hamilton: Spill the beans. My hon. Friend should not be shy.

Mr. Fraser: I leave that to my hon. Friend the Member for Fife, Central (Mr. Hamilton). The right hon. Lady has given the green light. There was also the question of the price of bread, which is in the hands of a monopoly. Two firms control the market. She abandoned any kind of control there. That began to indicate that firms could go ahead and increase prices where they wanted. The right hon. Lady then abandoned noti-


fication and finally discharged altogether the activities of the Price Commission. So she gave the green light to these matters.
Secondly, the right hon. Lady created an atmosphere in which price increases were acceptable because nothing could be done about them. I believe that the then Tory Opposition created an inflationary expectation because of their attitude to all that the Labour Government tried to do about rising prices.
We can add a further accusation against the right hon. Lady and the Government. They have not only given the green light to price increases and abandoned any form of control, but, as has been clearly demonstrated in nearly every speech by my right hon. and hon. Friends, they have created inflation. What else was the increase in value added tax but the largest addition to the retail price index that we have seen for some time?
Indeed, the Government were able, in one month, to increase the rate of price inflation by a figure that was reached in six months under a Labour Government, when we had price inflation down to about 8 or 9 per cent. In one month the Government were able to bring about that lift in the retail price index by increasing VAT. I do not want to rehearse further all the promises made to the public during the last election and the deceptions used.
The increase in mortgage interest rate is still in the pipeline and its effect has not yet been seen in the retail price index. We have not yet seen the effects of rate increases or of increased interest charges. Although these are still to come, the rate of price inflation is 17·2 per cent.—almost 75 per cent. higher than the rate of inflation that the Government inherited when they came into office in May last year. The Bill takes the brakes off completely.
My hon. Friend the Member for Caithness and Sutherland described clause 13 as a fig-leaf. It is certainly that. It is constructed in such a way that, unless it is amended, it will be almost impossible, if the Minister wants to do so, to refer

a price increase. We all understand that there is no power to do anything about it if the Minister discovers that a price is too high after investigation. But how will she select a price? She cannot just refer a price under clause 13. It has to be a price that causes concern. But that is not enough, because it has to be a price that involves "major public concern". That delimits the Minister's powers. However, the Minister does not leave it there because she then adds that it must be "of general economic importance". As if that were not enough, the right hon. Lady then says that consumers have to be "significantly affected". The Minister has so drawn the provisions of this fig-leaf that she will find it almost impossible to refer anything under it.

What concerns us most is that in response to a long debate, in which concern has been expressed from many quarters about price increases and in which particular price increases have been drawn to the Minister's attention, and the general trend of inflation has been debated before her, no strategy, plan or detailed outline has been given of the way the Government propose to deal with these matters.

The Opposition have seen adequately proved that the Government not only have no strategy on inflation but most of their policies have so far led to increased inflation. The Government have embarked upon inflationary policies which will consume the country and the Government.

Lord Byron said on the death of Castlereagh that that gentleman cut his own throat but not before he cut his country's throat. What Lord Byron said about Castlereagh on that occasion will be true in a few years' time of the Conservative Party. The Conservatives have damaged the country, but in due course the country will take its revenge on that party for deceiving the electorate at the last election.

Question put, That the clause be read a Second time:—

The House divided: Ayes 150, Noes 196.

Division No.141]
AYES
[8.14 p.m.


Abse, Leo
Armstrong, Rt Hon Ernest
Bennett, Andrew (Stockport N)


Allaun, Frank
Ashton, Joe
Booth, Rt Hon Albert


Anderson, Donald
Atkinson, Norman (H'gey, Tott'ham)
Boothroyd, Miss Betty


Archer, Rt Hon Peter
Bagier, Gordon A. T.
Bray, Dr Jeremy




Brown, Hugh D. (Provan)
Fraser, John (Lambeth, Norwood)
Mulley, Rt Hon Frederick


Brown, Robert C. (Newcastle W)
Gilbert, Rt Hon Dr John
Newens, Stanley


Brown, Ronald W. (Hackney S)
Gourlay, Harry
Oakes, Rt Hon Gordon


Brown, Ron (Edinburgh, Leith)
Grant, George (Morpeth)
Orme, Rt Hon Stanley


Buchan, Norman
Hamilton, W. W. (Central Fife)
Palmer, Arthur


Callaghan, Jim (Middleton &amp; P)
Hardy, Peter
Park, George


Campbell-Savours, Dale
Haynes, Frank
Parry, Robert


Canavan, Dennis
Heffer, Eric S.
Powell, Raymond (Ogmore)


Carmichael, Neil
Home Robertson, John
prescott, John


Carter-Jones, Lewis
Hooley, Frank
Race, Reg


Cocks, Rt Hon Michael (Bristol S)
Hudson Davies, Gwilym Ednyfed
Richardson, Jo


Cohen, Stanley
Hughes, Mark (Durham)
Roberts, Albert (Normanton)


Coleman, Donald
Hughes, Robert (Aberdeen North)
Roberts, Ernest (Hackney North)


Concannon, Rt Hon J. D.
Hughes, Roy (Newport)
Rooker, J.W.


Conlan, Bernard
Johnson, James (Hull West)
Ross, Ernest (Dundee West)


Cook, Robin F.
Johnson, Walter (Derby South)
Sheerman, Barry


Cowans, Harry
Jones, Rt Hon Alec (Rhondda)
Shore, Rt Hon Peter (Step and Pop)


Craigen, J. M. (Glasgow, Maryhill)
Jones, Dan (Burnley)
Smith, Rt Hon J. (North Lanarkshire)


Cryer, Bob
Kilroy-Silk, Robert
Snape, Peter


Cunliffe, Lawrence
Lambie, David
Soley, Clive


Dalyell, Tam
Lamond, James
Spearing, Nigel


Davidson, Arthur
Leadbitter, Ted
Spriggs, Leslie


Davis, Clinton (Hackney Central)
Leighton, Ronald
Stewart, Rt Hon Donald (W Isles)


Davis, Terry (B'rm'ham, Stechford)
Lestor, Miss Joan (Eton &amp; Slough)
Stoddart, David


Dean, Joseph (Leeds West)
Lewis, Arthur (Newham North West)
Stott, Roger


Dempsey, James
Lewis, Ron (Carlisle)
Strang, Gavin


Dewar, Donald
Litherland, Robert
Taylor, Mrs Ann (Bolton West)


Dixon, Donald
Lyon, Alexander (York)
Thorne, Stan (Preston South)


Dobson, Frank
Lyons, Edward (Bradford West)
Tinn, James


Dormand, Jack
McDonald, Dr Oonagh
Torney, Tom


Douglas, Dick
McElhone, Frank
Wainwright, Edwin (Dearne Valley)


Dubs, Alfred
McGuire, Michael (Ince)
Watkins, David


Dunn, James A. (Liverpool, Kirkdale)
McKay, Allen (Penistone)
Weetch, Ken


Dunwoody, Mrs Gwyneth
McKelvey, William
Welsh, Michael


Eadie, Alex
MacKenzie, Rt Hon Gregor
White, Frank R. (Bury &amp; Radcliffe)


Eastham, Ken
McWilliam, John
Wigley, Dafydd


Edwards, Robert (Wolv SE)
Marks, Kenneth
Wilson, Gordon (Dundee East)


Ellis, Raymond (NE Derbyshire)
Marshall, David (Gl'sgow.Shettles'n)
Wilson, William (Coventry SE)


Evans, Ioan (Aberdare)
Marshall, Dr Edmund (Goole)
Winnick, David


Evans, John (Newton)
Marshall, Jim (Leicester South)
Woodall, Alec


Field, Frank
Mason, Rt Hon Roy
Woolmer, Kenneth


Fitch, Alan
Maynard, Miss Joan
Wright, Sheila


Flannery, Martin
Mikardo, Ian
Young, David (Bolton East)


Fletcher, Ted (Darlington)
Millan, Rt Hon Bruce



Foot, Rt Hon Michael
Mitchell, R. C. (Soton, Itchen)
TELLERS FOR THE AYES:


Ford, Ben
Morris, Rt Hon Charles (Openshaw)
Mr. Walter Harrison and


Forrester, John
Morton, George
Mr. James Hamilton.


Foster, Derek






NOES


Aitken, Jonathan
Carlisle, Rt Hon Mark (Runcorn)
Hannam, John


Alexander, Richard
Chapman, Sydney
Haselhurst, Alan


Alton, David
Churchill, W. S.
Havers, Rt Hon Sir Michael


Aspinwall, Jack
Clark, Hon Alan (Plymouth, Sutton)
Hawkins, Paul


Atkins, Robert (Preston North)
Clark, Sir William (Croydon South)
Hawksley, Warren


Atkinson, David (B'mouth, East)
Clarke, Kenneth (Rushcliffe)
Hayhoe, Barney


Banks, Robert
Cockeram, Eric
Heddle, John


Beaumont-Dark, Anthony
Colvin, Michael
Henderson, Barry


Beith, A. J.
Cranborne, Viscount
Hicks, Robert


Bendall, Vivian
Critchley, Julian
Hill, James


Benyon, Thomas (Abingdon)
Crouch, David
Hogg, Hon Douglas (Grantham)


Benyon, W. (Buckingham)
Dean, Paul (North Somerset)
Hordern, Peter


Berry, Hon Anthony
Dover, Denshore
Howells, Geraint


Best, Keith
Dunn, Robert (Dartford)
Hunt, David (Wirral)


Bevan, David Gilroy
Dykes, Hugh
Hunt, John (Ravensbourne)


Biggs-Davison, John
Eden, Rt Hon Sir John
Johnson Smith, Geoffrey


Blackburn, John
Fairgrieve, Russell
Jopling, Rt Hon Michael


Bonsor, Sir Nicholas
Faith, Mrs Sheila
Kaberry, Sir Donald


Boscawen, Hon Robert
Farr, John
Kellett-Bowman, Mrs Elaine


Boyson, Dr Rhodes
Fenner, Mrs Peggy
Kershaw, Anthony


Braine, Sir Bernard
Finsberg, Geoffrey
Knight, Mrs Jill


Bright, Graham
Fletcher, Alexander (Edinburgh N)
Lang, Ian


Brinton, Tim
Fookes, Miss Janet
Langford-Holt, Sir John


Brittan, Leon
Fraser, Peter (South Angus)
Latham, Michael


Brown, Michael (Brigg &amp; Sc'thorpe)
Fry, Peter
Lawrence, Ivan


Browne, John (Winchester)
Garel-Jones, Tristan
Lawson, Nigel


Bruce-Gardyne, John
Glyn, Dr Alan
Lee, John


Buck, Antony
Goodhew, Victor
Le Marchant, Spencer


Budgen, Nick
Gorst, John
Lennox-Boyd, Hon Mark


Burden, F. A.
Gow, Ian
Lester, Jim (Beeston)


Butcher, John
Gower, Sir Raymond
Loveridge, John


Butler, Hen Adam
Gray, Hamish
Lyell, Nicholas


Cadbury, Jocelyn
Griffiths, Eldon (Bury St Edmunds)
Macfarlane, Neil


Carlisle, John (Luton West)
Griffiths, Peter (Portsmouth N)
MacGregor, John


Carlisle, Kenneth (Lincoln)
Hamilton, Michael (Salisbury)
MacKay, John (Argyll)







McOuarrie, Albert
Pink, R. Bonner
Stevens, Martin


Major, John
Pollock, Alexander
Stradling Thomas, J.


Mather, Carol
Porter, George
Tebbit, Norman


Mawby, Ray
Powell, Rt Hon J. Enoch (S Down)
Temple-Morris, Peter


Mawhinney, Dr Brian
Prentice, Rt Hon Reg
Thatcher, Rt Hon Mrs Margaret


Maxwell-Hyslop, Robin
Price, David (Eastleigh)
Thompson, Donald


Mellor, David
Proctor, K. Harvey
Thorne, Neil (Ilford South)


Meyer, Sir Anthony
Raison, Timothy
Thornton, Malcolm


Miller, Hal (Bromsgrove &amp; Redditch)
Rathbone, Tim
Townend, John (Bridlington)


Mills, Iain (Meriden)
Rhodes James, Robert
Trippier, David


Mills, Peter (West Devon)
Rifkind, Malcolm
Viggers, Peter


Miscampbell, Norman
Roberts, Michael (Cardiff NW)
Waddington, David


Moate, Roger
Ross, Wm. (Londonderry)
Wainwright, Richard (Colne Valley)


Moore, John
Rost, Peter
Wakeham, John


Morrison, Hon Charles (Devizes)
Sainsbury, Hon Timothy
Walker, Bill (Perth &amp; E Perthshire)


Morrison, Hon Peter (City of Chester)
St. John-Stevas, Rt Hon Norman
Waller, Gary


Murphy, Christopher
Shelton, William (Streatham)
Ward, John


Myles, David
Shepherd, Colin (Hereford)
Warren, Kenneth


Neale, Gerrard
Shepherd, Richard (Aldridge-Br'hills)
Watson, John


Needham, Richard
Silvester, Fred
Wells, Bowen (Hert'rd &amp; Stev'nage)


Nelson, Anthony
Sims, Roger
Wickenden, Keith


Newton, Tony
Skeet, T. H. H.
Wiggin, Jerry


Onslow, Cranley
Smith, Cyril (Rochdale)
Wilkinson, John


Oppenheim, Rt Hon Mrs Sally
Smith, Dudley (War. and Leam'ton)
Winterton, Nicholas


Osborn, John
Speed, Keith
Wolfson, Mark


Page, John (Harrow West)
Speller, Tony
Young, Sir George (Acton)


Page, Richard (SW Hertfordshire)
Spence, John
Younger, Rt Hon George


Parris, Matthew
Spicer, Michael (S Worcestershire)



Patten, Christopher (Bath)
Sproat, Iain
TELLERS FOR THE NOES:


Patten, John (Oxford)
Stanbrook, Ivor
Mr. John Cope and


Penhaligon, David
Stanley, John
Lord James Douglas-Hamilton.


Percival, Sir Ian
Steen, Anthony

Question accordingly negatived.

New Clause 4

GENERAL ORDERS FOLLOWING COMPETITION AND GENERAL REFERENCES

''(1) If it appears to the Secretary of State that
(a) two or more reports of the Commission on competition references (being reports which conclude that a person has engaged in an anti-competitive practice which operated or might be expected to operate against the public interest) deal with substantially the same anti-competitive practice; and
(b) that it would be appropriate to make an order under this section; or
(c) that it would be appropriate to make an order under this section following the publication of a report on a general reference under section 78 of the Fair Trading Act 1973 (being a report which recommends the desirability of action of a specified description for the purposes set out in subsection (2) of that section)
the Secretary of State may make an order prohibiting persons generally, or a class of persons, from engaging in the anti-competitive practice or other course of conduct described in the respective reports or a practice or conduct which, in the opinion of the Secretary of State, is substantially the same.
(2) The power to make an order under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(3) In the Fair Trading Act 1973—
(a) section 90 (general provisions as to orders under section 56 etc.) except subsection

(b) section 91 (2) (publication of proposals to make an order),
(c) section 93 (enforcement of certain orders), and
(d) Part I of Schedule 8 (powers exercisable by orders under section 56 etc.),
shall have effect as if any reference in those provisions to an order under section 56 of that Act included a reference to an order under this section.'.—[Mr. John Fraser.]>

Brought up, and read the First time.

Mr. John Fraser: I beg to move, That the clause be read a Second time.
The purpose of the clause is to enable the Secretary of State to make an order which would ban an anti-competitive practice across the board if it were found to be a practice indulged in by more than a mere handful of firms.
In Committee, we discovered a weakness in the Bill. As the law will stand when the Bill becomes an Act, one can have a conventional monopoly reference where any number of people can be investigated, but it must be a monopoly test—whether a complex or a single monopoly test—before any of the powers in the Fair Trading Act can be applied. That is one way of approaching the matter.
Secondly, there can be a competition reference under the terms of the Bill where there does not have to be a monopoly test but where the competition reference will be against, if that is the right word, only a limited number of firms.


The right hon. Lady made it clear, when resisting amendments that would enable a particular class of persons to be investigated—for example, estate agents, members of a profession or a large group of companies—that a competition reference would be limited to a handful of firms, and perhaps more usually to one firm.
Thirdly, under the Fair Trading Act, as it stands and as it will continue to stand, the right hon. Lady can make a general reference to the Monopolies Commission, as the Labour Administration did on discounting; but, at the end of a general reference, there is no power to do anything about the Monopoly Commission's conclusions, apart from passing a new Act of Parliament. That is what happens in relation to resale price maintenance and price-fixing agreements. The power to deal generally with an anticompetitive practice that operates against the public interest, but where there is no monopoly, is absent from the Bill.
8.30 pm
Let us imagine what will happen if the Monopolies Commission reports on discounting and finds that discounting practices that are not justified on economic grounds are against the public interest. The right hon. Lady will know that there is a good deal of concern, by small retailers in particular, about discounting practices. The Monopolies Commission may find in favour of those practices. If there is to be any speedy justice and remedying of the anti-competitive practice, the Government will require a power, which they do not now possess, to act across the board.
Secondly, what does the right hon. Lady propose to do about car spares? The Price Commission report on prices, costs and margins in the manufacture and distribution of car parts made clear that
In practice, the exclusivity of supply of car parts resulting from the vehicle franchise system is an unreasonable restraint on competition and is a matter which ought to be rectified.
It has been made clear that the Secretary of State wants a competition reference, after an investigation by the Director General of Fair Trading, but that there will be an investigation into the franchise system, which operates against the public interest and which appeared to the Price Commission to be an anticompetitive practice.
Appendix 2 of the report on car spares indicates that about 10 firms indulge in that practice. That figure is too large to be the subject of the Director General's investigation or a competition reference, as the right hon. Lady indicated. If the right hon. Lady contradicts me, I shall be happy. It became clear from her remarks in Committee that an investigation by the Director General of Fair Trading, or a competition reference, would not cover such a large number of firms, yet there is overwhelming evidence of the need to do something about franchising, not simply of car spare parts but of other spare parts.
I give a third example. The Liesner committee reported that the practices of rental-only contracts and full-line forcing should be outlawed across the board. What will happen if there is a series of investigations by the Director General of Fair Trading, or a series of competition references, and it becomes apparent that rental-only contracts and full-line forcing are evils that should be dealt with more widely than by a mere investigation or reference? Why should not the Government have the power to say that that practice, which has been repeatedly shown to be against the public interest, should be outlawed generally?
I give another example, to which my attention was drawn this morning. I understand that a multiple High Street firm, whose name is a household word, is being refused a supply of British-produced television sets because it would sell them too cheaply. It is having to go to Spain and to Portugal to buy sports equipment and bicycles. British manufacturers are not prepared to sell them to this High Street retailer, because he would sell them too cheaply.
I have given three examples of refusal of supply in respect of one High Street retailer. I did not make a presumption about such matters. Perhaps my remarks can be rebutted by the manufacturers. I am not trying to decide the issue at this stage, but, as a hypothesis, what happens if wefind—there is a good deal of suspicion for it—that refusal to supply, particularly to price-cutters, is a practice that is indulged in widely, against the public interest, and is inflationary? There is no power in the Bill to act except by way of investigation by the Director General.
A reference to the Monopolies Commission or to the Director General of Fair Trading would be possible, but that has already happened in the case of refusal of supply. Nothing is followed up by way of Government orders. The right hon. Lady should not ignore the weaknesses of the Bill. The Government have not been backward in acting drastically or courageously, or whichever adjective one cares to use. They have not been backward or indecisive in cutting back on public expenditure or taking draconian measures against consumers, housewives, tenants or ratepayers. The Government now have an opportunity to be decisive, courageous and forthcoming about the malpractices of big business, in order to increase competition. It is in that spirit that I commend the new clause.

Mrs. Sally Oppenheim: I am sure that the hon. Member for Norwood (Mr. Fraser) will be aware that his new clause is extremely tempting for the Government. At the outset, on Second Reading, my right hon. Friend the Secretary of State said that our approach was not to make general prohibitions by order. We prefer the case-by-case approach, because we do not want to follow a course of action which might by its very nature be exclusive. If we had simply provided a list of practices that were listed as anti-competitive practices, we might have included some things that we did not want to include and excluded other things that we wanted to include.
The hon. Gentleman is taking it a step further. In effect, he is saying "When we know, arising out of the investigations, that there is a practice operating generally across a whole industry or in a very widespread way, why not take powers under the Bill to prohibit that practice, once it is established that it is operating in this way?" I fully understand his point. It is in no way negated by the fact that we have chosen a particular course of action in not naming practices at the outset. That is why his new clause is very tempting. I have considered it very carefully, because there are many aspects of it that I find particularly attractive. I have looked at the kinds of things that would be likely to come under this power.
The hon. Gentleman has talked about cases of minimum pricing and of refusing

to supply. He knows perfectly well that those can be pursued in the case of individual companies, or even in the case of more than one company, under the powers that we have already in the Bill. By his new clause, he wishes to outlaw the practice altogether. The kind of practice that he wants to outlaw altogether in his new clause is not appropriate to be dealt with in this way. Resale price maintenance is a very good example. It was something that needed to be outlawed, but it was appropriate that it should be done by primary legislation, so that consultation about drafting, about definitions and about all the things that go into this kind of legislation could take place.
We are not saying that it will never be desirable to ban these practices across the board. What we are saying is that it is not appropriate and that we believe it is not desirable to do it by means of delegated legislation.

Mr. John Fraser: Nothing in the drafting of the new clause prevents a very long period of consultation with the interests concerned there is no time limit on it. It is an order that would substitute secondary legislation for primary legislation, but if that brings prices down and that satisfies a public demand to end a racket, I do not see why it should not be done.

Mrs. Oppenheim: The hon. Gentleman used the word "racket". I prefer to use the word "practice". He may have in mind such things as resale price maintenance. He may have in mind discriminatory price discounting against which the Monopolies and Mergers Commission may find. Minimum pricing or refusal to supply, as the hon. Gentleman suggests, may also be referred, and the Commission may find against those practices. We believe that the right course of action is to introduce primary legislation to deal with these matters.
I know what the hon. Gentleman will say next, and I have sympathy with it. He will say that Governments never find time for primary legislation. It is perfectly true that, although the resale price maintenance legislation found its way on to the statute book, it is sometimes difficult for Governments to find time to legislate across the board against such practices in the form of primary legislation.
I wish that we could find a middle way. I have spoken before about a middle way—the hon. Gentleman has picked it up in Committee—between primary and secondary legislation, which could deal more flexibly and more quickly with this type of thing. But in the absence of that middle way—the hon. Gentleman must take it from me that I am still searching for it—I fear that I have to reject his amendment, not because I am not generally in sympathy with the objectives but because I do not think that this is the means with which to deal with the problem.
It will be very interesting to see how many of the kinds of cases that he has described are investigated by the Office of Fair Trading—and subsequently by the Monopolies and Mergers Commission—and stop, and how many companies, as a result of those precedents, desist from these practices. It is not as simple as that. In the failure-to-supply case, if a complaint is made to the Office of Fair Trading the company concerned may bring another and different sanction against the company that wanted the goods supplied—

Mr. Campbell-Savours: Is the Minister saying that fear of an investigation that may take three years is sufficient to make people desist from that practice?

Mrs. Oppenheim: Such investigations cannot take three years. It would be very difficult for them to do so. If a precedent is established against one company, and if there is an adverse effects finding by the Monopolies and Mergers Commission following an investigation concerning failure to supply, other companies will be more careful before engaging in such practices. The precedent will have been created. I accept that that does not entirely meet the hon. Gentleman's point.
Perhaps there are cases where there should be a general prohibition. Where that occurs is should be done by primary legislation unless we find a middle way between the two, and we have not yet done so. When we go further with our competition policy, particularly when we implement the recommendations in the Liesner report, I shall see whether that can be incorporated in future legislation as primary legislation.

Mr. Robert Hughes: I hope that my hon. Friend the Member for Norwood

(Mr. Fraser) and the Minister will forgive me when I say that she made a better speech in favour of the new clause than he. The essence of her speech was that she had great sympathy with the objectives of the new clause and that she was tempted to accent it. She said that it was not appropriate. However, she justified its appropriateness by saying that the case-by-case approach could be best dealt with by primary legislation. She clearly said that Governments always find it difficult to find time for such legislation. We are all familiar with that problem.

Mrs. Sally Oppenheim: I hope that I have not misled the hon. Gentleman, because these problems can be dealt with on a case-by-case basis under the Bill. The hon. Member for Norwood (Mr. Fraser) wants a general prohibition.

Mr. Hughes: I accept the Minister's correction, but she also said that one problem was that if an investigation took place into a company's anti-competitive pricing arrangements, the company might substitute some other form of anti-competitive practice. As each company finds a way of escaping the Government's case by-case approach and as fresh investigations are needed, there will be no end to the process. The Minister always says that we need primary legislation to deal with this. I cannot remember how long it was before a Government were persuaded to bring forward the ending of resale price maintenance. It took a long time and a great deal of argument before the Conservative Government brought forward a Bill to end that practice. I think that the Minister concedes that in a number of important areas restrictive practices are being extensively used. Once that is admitted—and as we both wish to make sure that prices are kept down as much as possible—it is nonsensical to hold that point of view yet deny oneself the opportunity to have those powers should they prove necessary.

Mrs. Sally Oppenheim: Again, I hope that I have not misled the hon. Gentleman. I said that a general prohibition would not catch the type of case that I described where a company started to use an entirely different sanction from that described. In a general prohibition, those companies would not be caught. Under


the Bill, that could be the subject of further investigation.

Mr. Hughes: My point is that a further investigation has no power. If we accept, under the new clause, the power to deal with it by delegated legislation rather than primary legislation, we shall be able to act more speedily. At the same time, there could still be proper consultation.
I am sorry that on this occasion the right hon. Lady has not succumbed to temptation. I hope that before completion of all stages of the Bill she will allow hereself one small indulgence.

Mr. John Fraser: I am sorry that the right hon. Lady is not able to accept the new clause. I do not know whether I speak out of place, but I believe that we waste far too much time in this House on primary legislation on administrative law. Anyone who has been a Minister will know that there is a long queue of useful Bills in every Department because we have a fixation and fascination for primary legislation when a great number of matters could be dealt with perfectly adequately by secondary legislation. This is one instance.

I have drafted the clause in such a way that I am not introducing an across-the-board prohibition. The drafting of the order could leave exceptions and reservations. I know that there are great difficulties about a refusal to supply and discounting, but it is perfectly possible to construct an order that contains a prohibition and also creates an appeal or arbitration system in respect of, for example, refusal to supply or unfair discounting. It would ensure that we did not create the rigidities of the Patman-Robinson system or the flexibility of American anti-trust legislation but would ban a practice in the sensible, pragmatic way which is the tradition of British competition legislation.

It is a pity and a waste of future parliamentary time that the right hon. Lady should reject the suggestion which I put forward to help her and for her to use in the interests of competition. If she cannot accept it, I shall want to divide the House.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 138, Noes 182.

Division No. 142]
AYES
[8.45 pm


Allaun, Frank
Dubs, Alfred
Leighton, Ronald


Anderson, Donald
Dunn, James A. (Liverpool, Kirkdale)
Lestor, Miss Joan (Eton &amp; Slough)


Archer, Rt Hon Peter
Dunwoody, Mrs Gwyneth
Lewis, Arthur (Newham North West)


Armstrong, Rt Hon Ernest
Eadie, Alex
Lewis, Ron (Carlisle)


Ashton, Joe
Eastham, Ken
Litherland, Robert


Atkinson, Norman (H'gey, Tott'ham)
Edwards, Robert (Wolv SE)
McCartney, Hugh


Bagier, Gordon A. T.
Ellis, Raymond (NE Derbyshire)
McDonald, Dr Oonagh


Bennett, Andrew (Stockport N)
Evans, loan (Aberdare)
McElhone, Frank


Booth, Rt Hon Albert
Evans, John (Newton)
McGuire, Michael (Ince)


Boothroyd, Miss Betty
Field, Frank
McKay, Allen (Penistone)


Bray, Dr Jeremy
Fitch, Alan
MacKenzie, Rt Hon Gregor


Brown, Robert C. (Newcastle W)
Flannery, Martin
McWilliam, John


Brown, Ronald W. (Hackney S)
Fletcher, Ted (Darlington)
Marshall, David (Gl'sgow, Shettles'n)


Brown, Ron (Edinburgh, Leith)
Foot, Rt Hon Michael
Marshall, Dr Edmund (Goole)


Buchan, Norman
Ford, Ben
Marshall, Jim (Leicester South)


Callaghan, Jim (Middleton &amp; P)
Foster, Derek
Mason, Rt Hon Roy


Campbell-Savours, Dale
Fraser, John (Lambeth, Norwood)
Maynard, Miss Joan


Canavan, Dennis
Gilbert, Rt Hon Dr John
Mikardo, Ian


Carmichael, Neil
Gourlay, Harry
Millan, Rt Hon Bruce


Carter-Jones, Lewis
Grant, George (Morpeth)
Mitchell, R. C. (Soton, Itchen)


Cocks, Rt Hon Michael (Bristol S)
Hamilton, James (Bothwell)
Morris, Rt Hon Charles (Openshaw)


Cohen, Stanley
Hamilton, W. W. (Central Fife)
Morton, George


Concannon, Rt Hon J. D.
Hardy, Peter
Mulley, Rt Hon Frederick


Conlan, Bernard
Harrison, Rt Hon Walter
Newens, Stanley


Cook, Robin F.
Haynes, Frank
Oakes, Rt Hon Gordon


Craigen, J. M. (Glasgow, Maryhill)
Heffer, Eric S.
Orme, Rt Hon Stanley


Cryer, Bob
Home Robertson, John
Palmer, Arthur


Cunliffe, Lawrence
Hooley, Frank
Park, George


Dalyell, Tam
Hudson Davies, Gwilym Ednyfed
Parry, Robert


Davis, Clinton (Hackney Central)
Hughes, Mark (Durham)
Powell, Raymond (Ogmore)


Davis, Terry (B'rm'ham, Stechford)
Hughes, Robert (Aberdeen North)
Prescott, John


Dean, Joseph (Leeds West)
Hughes, Roy (Newport)
Race, Reg


Dempsey, James
Johnson, Walter (Derby South)
Rees, Rt Hon Merlyn (Leeds South)


Dewar, Donald
Jones, Rt Hon Alec (Rhondda)
Richardson, Jo


Dixon, Donald
Jones. Dan (Burnley)
Roberts, Albert (Normanton)


Dobson, Frank
Kilroy-Silk, Robert
Roberts, Ernest (Hackney North)


Dormand, Jack
Lamond, James
Rooker, J.W.


Douglas, Dick
Leadbitter, Ted
Ross, Ernest (Dundee West)




Shore, Rt Hon Peter (Step and Pop)
Strang, Gavin
Wilson, William (Coventry SE)


Silkin, Rt Hon John (Deptford)
Taylor, Mrs Ann (Bolton West)
Winnick, David


Smith, Rt Hon J. (North Lanarkshire)
Torney, Tom
Woolmer, Kenneth


Snape, Peter
Wainwright, Edwin (Dearne Valley)
Wright, Sheila


Soley, Clive
Weetch, Ken
Young, David (Bolton East)


Spearing, Nigel
Welsh, Michael



Spriggs, Leslie
White, Frank R. (Bury &amp; Radcliffe)
TELLERS FOR THE AYES:


Stewart, Rt Hon Donald (W Isles)
Wigley, Dafydd
Mr. James Tinn and


Stoddart, David
Wilson, Gordon (Dundee East)
Mr. Donald Coleman.


Stott, Roger






NOES


Alexander, Richard
Griffiths, Eldon (Bury St Edmunds)
Penhaligon, David


Alton, David
Griffiths, Peter (Portsmouth N)
Pink, R. Bonner


Aspinwall, Jack
Grist, Ian
Pollock, Alexander


Atkins, Robert (Preston North)
Hamilton, Michael (Salisbury)
Porter, George


Atkinson, David (B'mouth, East)
Hannam, John
Powell, Rt Hon J. Enoch (S Down)


Banks, Robert
Haselhurst, Alan
Prentice, Rt Hon Reg


Beaumont-Dark, Anthony
Havers, Rt Hon Sir Michael
Price, David (Eastleigh)


Beith, A. J.
Hawkins, Paul
Proctor, K. Harvey


Bendall, Vivian
Hawksley, Warren
Raison, Timothy


Benyon, Thomas (Abingdon)
Hayhoe, Barney
Rathbone, Tim


Benyon, W. (Buckingham)
Heddle, John
Rhodes James, Robert


Best, Keith
Henderson, Barry
Rifkind, Malcolm


Bevan, David Gilroy
Hicks, Robert
Ross, Wm. (Londonderry)


Biggs-Davison, John
Hill, James
Rost, Peter


Blackburn, John
Hogg, Hon Douglas (Grantham)
Sainsbury, Hon Timothy


Bonsor, Sir Nicholas
Hordern, Peter
St. John-Stevas, Rt Hon Norman


Boscawen, Hon Robert
Howells, Geraint
Shelton, William (Streatham)


Boyson, Dr Rhodes
Hunt, David (Wirral)
Shepherd, Colin (Hereford)


Bright, Graham
Hunt, John (Ravensbourne)
Shepherd, Richard (Aldridge-Br' hills)


Brinton, Tim
Johnson Smith, Geoffrey
Silvester, Fred


Brittan, Leon
Jopling, Rt Kon Michael
Sims, Roger


Brooke, Hon Peter
Kellett-Bowman, Mrs Elaine
Skeet, T. H. H.


Brown, Michael (Brigg &amp; Sc'thorpe)
Langford-Holt, Sir John
Smith, Cyril (Rochdale)


Browne, John (Winchester)
Latham, Michael
Smith, Dudley (War. and Leam'ton)


Bruce-Gardyne, John
Lawrence, Ivan
Speed, Keith


Buck, Antony
Le Marchant, Spencer
Speller, Tony


Budgen, Nick
Lennox-Boyd, Hon Mark
Spence, John


Burden, F. A.
Lester, Jim (Beeston)
Spicer, Michael (S Worcestershire)


Butcher, John
Loveridge, John
Sproat, Iain


Butler, Hon Adam
Lyell, Nicholas
Stanbrook, Ivor


Cadbury, Jocelyn
Macfarlane, Neil
Stanley, John


Carlisle, John (Luton West)
MacGregor, John
Steen, Anthony


Carlisle, Kenneth (Lincoln)
MacKay, John (Argyll)
Stradling Thomas, J.


Carlisle, Rt Hon Mark (Runcorn)
McQuarrie, Albert
Tebbit, Norman


Chapman, Sydney
Major, John
Temple-Morris, Peter


Churchill, W. S.
Mather, Carol
Thatcher, Rt Hon Mrs Margaret


Clarke, Kenneth (Rushcliffe)
Mawby, Ray
Thompson, Donald


Cockeram, Eric
Mawhinney, Dr Brian
Thorne, Neil (Ilford South)


Colvin, Michael
Maxwell-Hyslop, Robin
Thornton, Malcolm


Crouch, David
Mellor, David
Townend, John (Bridlington)


Dean, Paul (North Somerset)
Meyer, Sir Anthony
Trippier, David


Dorrell, Stephen
Miller, Hal (Bromsgrove &amp; Redditch)
Vaughan, Dr Gerard


Douglas-Hamilton, Lord James
Mills, Iain (Meriden)
Viggers, Peter


Dover, Denshore
Mills, Peter (West Devon)
Waddington, David


Dunn, Robert (Dartford)
Moate, Roger
Wainwright, Richard (Colne Valley)


Dykes, Hugh
Molyneaux, James
Wakeham, John


Fairgrieve, Russell
Moore, John
Walker, Bill (Perth &amp; E Perthshire)


Faith, Mrs Sheila
Morrison, Hon Charles (Devizes)
Waller, Gary


Farr, John
Morrison, Hon Peter (City of Chester)
Ward, John


Fenner, Mrs Peggy
Murphy, Christopher
Warren, Kenneth


Finsberg, Geoftrey
Myles, David
Watson, John


Fletcher, Alexander (Edinburgh N)
Neale, Gerrard
Wells, Bowen (Hert'rd &amp; Stev'nage)


Fookes, Miss Janet
Needham, Richard
Wickenden, Keith


Fraser, Peter (South Angus)
Nelson, Anthony
Wilkinson, John


Fry, Peter
Newton, Tony
Winterton, Nicholas


Garel-Jones, Tristan
Onslow, Cranley
Wolfson, Mark


Glyn, Dr Alan
Oppenheim, Rt Hon Mrs Sally
Young, Sir George (Acton)


Goodhew, Victor
Osborn, John
Younger, Rt Hon George


Gorst, John
Page, John (Harrow West)



Gow, Ian
Page, Richard (SW Hertfordshire)
TELLERS FOR THE NOES:


Gower, Sir Raymond
Patten, Christopher (Bath)
Mr. Anthony Berry and


Greenway, Harry
Patten, John (Oxford)
Mr John Cope.

Question accordingly negatived.

New Clause 5

GENERAL REPORTS BY DIRECTOR GENERAL OF FAIR TRADING

'(1) It shall be the duty of the Director to make to the Secretary of State within one year of the coming into force of this Act and thereafter in each year a report which shall include a report on the performance of his functions and which shall also include a description of those courses of conduct which he has under section 3 of this Act found to be, in his opinion, constituting anti-competitive practices and a description of those courses of conduct which he might be minded to investigate under the said section.'—[Mr. John Fraser.]

Brought up, and read the First time.

Mr. John Fraser: I beg to move, That the clause be read a Second time.
This new clause provides for the Director General to publish an annual report and to give some indication of the matters that he is minded to investigate as anti-competitive practices. I do this briefly in the hope that I shall get some indication from the Government that they will meet the point, since they made a half-assurance in Committee. I think that at that point I can stop.

Mr. Tebbit: I should like to be as helpful as I can about this, although I am not sure that I am necessarily going to be able to be sufficiently helpful to satisfy the hon. Gentleman. We discussed this, of course, in Committee and, as we indicated then, there is no need to provide for an annual report on the Director General's activities under the Bill itself as he is already required by the Fair Trading Act to present an annual report on all his activities. But I appreciate that that is not the main point of the hon. Gentleman's concern, and we did undertake to consider further the principles underlying the new clause.
I do not believe that it would be helpful for the Director General to be required by statute to set out his policy towards various kinds of anti-competitive practices. This would put him under pressure to adopt a more rigid approach, which would be at variance with the flexibility that we feel he should have and that is at the heart of this legislation, but I can well understand the desire for some kind of guidance to be provided.
Indeed, with that end in view, my right hon. Friend has discussed this with the

Director General of Fair Trading, who has assured us that he will do everything in his power to provide as much guidance as possible on anti-competitive practices. It should be possible for him to analyse in general terms the circumstances in which they may arise and the manner in which they affect the competition, based on the experience of investigations under the Bill, and indicate any particular practices that cause concern.
9 pm
I suspect that the hon. Gentleman might want us to be still more definite than that, but to go further would cause the Director General some difficulties. I hope that when the hon. Gentleman thinks about it he will be content to leave it that both he and I and the Director General are agreed that as much guidance as possible should be given but that the Director General would not want to be bound either by statute or too closely by any commitment on his part as to precisely the form in which he would indicate the activities that he hopes to indulge in in the coming year.

Mr. Fraser: I am sure that the Minister does not give that form of words lightly and that industry and the public generally will be able to rely on that promise of an indication.

On that basis, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 6

AMENDMENT OF RESTRICTIVE TRADE PRACTICES ACT 1976

'Section 36 of the Restrictive Trade Practices Act 1976 is hereby amended by the deletion of the word "reasonable" in the first line thereof.'.—[Mr. John Fraser.]

Brought up, and read the First time.

Mr. John Fraser: I beg to move, That the clause be read a Second time.
The clause deals with an unsatisfactory position which has existed since the case of the Registrar of Restrictive Trading Agreements v W. H. Smith, reported in 1969 Appeal Cases. I shall leave my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) to develop the argument.

Mr. J. W. Rooker: I wish to explain to the House some of the reasons for the amendment. The clause looks fairly innocuous. The Restrictive Trade Practices Act 1976 was a consolidation measure. The antecedents of the clause are in section 14 of the Restrictive Trade Practices Act 1956. No change was made to that legislation in 1976.
Almost two years ago I moved a Ten-Minute Bill on this subject. The House gave me permission to introduce a Bill to put right what we considered to be a wrong and an unnecessary restriction on the powers of the Director General of Fair Trading, who was referred to in the 1956 legislation as the Registrar of Restrictive Trade Practices.
Briefly, I should like to explain the clause by giving three examples of where we think the powers of the Director General of Fair Trading are curtailed in the area of price fixing, because that is the subject matter of this part of the Restrictive Practices Act.
It is interesting to go back to some of the news cuttings of 1978 when the issue of price fixing, because of the behaviour of one or two large well-known companies, came to the attention of the press and the House. I can do no better than cite a couple of examples which put the issue in a nutshell for the benefit of the ordinary person in the street. The first example is from The Timesof 25 April 1978:
Walk into Marks and Spencer's Oxford Street store in London, steal half a dozen shirts and you are likely to find yourself in Marlborough Street Magistrates' Court with a hefty fine. Sit around a table with three or four other business men and agree to rig local authority contracts, thereby relieving the public purse of large sums of money and you will probably end up with nothing more than a judicial wigging and a warning not to be so naughty in future.

Mr. Arthur Lewis: Or a peerage.

Mr. Rooker: Perhaps a peerage. The Guardian described the gentleman who was responsible for price-fixing operations on a very large scale in a leader on 14 June 1978 entitled "Our League of Gentlemen". The first paragraph of the leader said:

If Mr. Bloggs of Clapham found a way of improperly removing £9 million of the Post Office's money, he would no doubt end up behind bars. To the ordinary man-in-the-street, the sight of BICC, Pirelli General, Standard Telephones and Cables and Telephone Cables getting away with a hefty out-of-court settlement for operating an unregistered and secret price-fixing agreement must look very much like one law for the private individual and another for the corporation".
There are dual standards. This is why we wish to give more powers to the Director General of Fair Trading. It has not happened since, but 1978 was a particularly good year for shining the spotlight on this area of defect in our law. In 1978, hundreds of secret, illegal price-fixing arrangements in the area of ready-mixed concrete came to light. Many of the purchasers would be local authorities and public corporations. The companies involved, as is well known, were those such as Ready Mixed Concrete, Tarmac, Tilling and Amey Roadstone.
In the same year, in the road surfacing industry or, as it is called, the black top industry, about 1,000 previously secret agreements were registered with the Office of Fair Trading—registered, of course, after they had been found out. One of the more blatant examples of large, allegedly private, corporations ripping off the public purse was the telephone cables industry. In an out-of-court settlement, the sum of £9 million had to be paid back to the Post Office.
The common thread running through these three industries was that the existence of the price-fixing arrangements did not come to notice because of the investigatory powers of the Director General of Fair Trading. They came about by accident, as a by-product of other investigations. The Ready Mixed Concrete example came about following action by a Leicestershire farmer. The black top arrangements came about through someone from the industry going to the Office of Fair Trading. The telephone cables saga came about as a by-product of a monopolies inquiry into the supply of telephone cables to the Post Office.
Section 36, the crucial section of the Act that we seek to amend, begins:
If the Director has reasonable cause to believe that a person being".
Lord Denning, in the 1969 judgment to which my hon. Friend the Member


for Norwood (Mr. Fraser) referred in moving the clause, said
That"—
meaning that particular power of the Director—
does not make the Registrar
—it was the Registrar then—
the judge of the matter. The words are not: '…if the Registrar thinks he has resonable cause to believe.' They are: If [he] has reasonable cause to believe', i.e., in fact.
I shall quote two more sentences by Lord Denning. I have great hopes that the Government may accept this new clause. Lord Denning said:
And it is for the judge to find whether or not reasonable cause did in fact exist. The registrar can, of course, act on information from credible people and the like, but if he seeks an order from the court, he must place his information before the court so that the court can see whether in fact there is reasonable cause to believe".
The reference to seeking an order from the court is to get the documents from the companies to see whether they have been engaged in illegal price-fixing arrangements. The Director General of Fair Trading and his staff cannot act on a hunch or on an informal tip-off. They cannot, I suppose, to put it simply, go on "fishing expeditions". That is a term that would fit the situation.
The Director General has made clear that this is a restriction on the particular powers of his office. On 25 April 1978, according to The Times, he said:
I dare not issue a formal inquiry notice unless I am really confident that I could if necessary show the court that there is a restrictive agreement".
Until the Director General has the documents from the companies, he cannot prove that there is a restrictive agreement, yet in order to issue a notice to get the document he must have "reasonable cause to believe."
We have unduly fettered that public official who does an important job. One of the Government's policies is to make competition work. That does not mean that suppliers of concrete to local authorities should get together to rig the contracts. It does not mean that large companies supplying the Post Office should agree which of them should supply the low tender for cables so that they can share the work. That is not what is meant by competition.
The original proposers of the Restrictive Practices Act 1956—a Conservative Government—did not believe that that would happen. The Minister in charge of the Restrictive Practices Bill, the then President of the Board of Trade, said on Second Reading:
The purpose of any Bill on this topic must be to secure that the virtues of free enterprise—initiative, adaptability and risk-taking—are not throttled by restrictions imposed by industry upon itself.
He was talking about secret agreements. The Minister continued:
Agreements between traders about the prices that they will charge, or the markets or consumers to whom they will sell, or the quantities that they will produce, are all tempting ways of avoiding competition.—[Official Report, 6 March 1956; Vol. 549, c. 1927.]
The same Minister on Third Reading stated:
We on this side believe in a system of free competitive enterprise."—[Official Report, 14 June 1956; Vol. 554, c. 863.]
The Minister did not know that a few years later Lord Denning would put a restrictive interpretation on that clause. The Minister was the then Mr. Peter Thorneycroft, now Lord Thorneycroft and chairman of the Conservative Party. I am surprised that he is not in the Cabinet.
As a result of the telephone cable saga, four companies had to pay back £9 million to the Post Office. When I raised this matter originally I fell foul of Mr. Speaker—and rightly so. I attacked a Member of another place. As an elected representative of the people, one cannot cast aspersions on Members of the Chamber down the Corridor. One of my hon. Friends was actually named and sent out of the Chamber for what he said about Lord Thorneycroft. I do not intend to fall into that trap.
When the illegal, secret price-fixing ring was operating against the Post Office and telephone users, Lord Watkinson was on the board of British Insulated Callender's Cables, Lord Aldington was vice-chairman of GEC, which controls telephone cables, and Lord Caccia, a former head of the Diplomatic Service, was on the board of Standard Telephones and Cables. Each of those companies had a Lord on the board. They preached the virtues of free enterprise, competition and inititiative and yet they controlled companies which were caught out. They put


the matter right and paid the Post Office back. It is important that they should have done that.
We should not take the chance of the House and the public finding out about such deals by accident. The Director General of Fair Trading should be able to act on a hunch. He should be able to operate on the basis of fishing expeditions. I like the idea of the Director General deciding, for no good reason and on no evidence, that he will call for documents from companies in a particular industry to see whether clause 36 is working propertly. If he were able to do that, it would be rather like the system of self-assessment of income tax that operates in America.
9.15 pm
It is fear that makes the American citizen fill in his tax returns correctly. When there is a check and he is caught out, everything is in the open. There do not have to be reasons for an investigation. I think that the sanction of fear in the context of big business is an important one and this House should give it to the Director General of Fair Trading. Though my hon. Friend's new clause is slightly different from the Ten-Minute Bill which the House of Commons gave me permission to introduce, it has the same effect. It removes the word "reasonable". Those who opposed my Ten-Minute Bill said that I was being unfair because I wished to give the Director General powers which related only to big business. I was asked about unfair practices in the trade unions. That hoary argument is being trotted out again but it is a separate issue.
We now have a Conservative Government proposing their own Bills. If they genuinely want to make competition work and allow it be seen to work, I cannot see why they will not accept this new clause. If they do not accept it, the first time that there is another outcry against—or sniff of—secret and illegal price-fixing rings, in whatever industry, their competition policy will be ineffective. They will have to admit that they found out about such rings by accident, because they had not given sufficient power to the Director General. The Government will have to defend the practices of such companies.
A Government in favour of competition

would not wish to defend those noble Lords on the boards of companies that were seen to have stolen £9 million from the Post Office. That is an unsavoury aspect of big business. This Government are the Government of big business, and I hope that they can see their way to accepting this new clause.

Mr. Tebbit: It is fair to say—I hope that he will not take it too much amiss—that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is inclined to spoil a good case. He was making a reputable case and it was easy to spoil it by overdoing it. He involved himself in a degree of invective which had a certain unhappy background to it and which springs from the hon. Gentleman's style. Perhaps I have spoilt a good case in my time by doing the same thing, so the criticism is fairly directed, either way, across the Floor of the House.
We accepted in Committee that the decision of the Appeal Court on the meaning of section 36 has proved to be an obstacle in the path of the Director General of Fair Trading in carrying out investigations into registrable but unregistered agreements. There is general agreement about that. However, it is not so easy to deal with the matter as might appear on the surface.
In Committee we said that it was not appropriate to deal with this matter in the Bill. More thought must be given to the best way of tackling this problem. I accept that, as do the hon. Member for Norwood (Mr. Fraser) and the hon. Member for Perry Barr. Perhaps the problem would be best considered in the context of separate legislation on restrictive trade practices, and I hope that we shall have legislation of that kind before too long.
Even worse from the point of view of the House this evening, I am advised by the lawyers that it is highly likely that the new clause would achieve the complete opposite of its intentions. It would simply entrench the court's interpretation of the present provision. I see the right hon. Member for Lanarkshire, North (Mr. Smith) wrinkling his brow. I also wrinkled my brow when I first heard that. The case, essentially, is that the word "reasonable" could be held to dilute the concept of "cause to believe" no to some extent. It implies the test of the


reasonable man coming to the same conclusion on balance. To remove it might imply that cause to believe had to be proved even more firmly than was suggested in the Appeal Court judgment to which the hon. Member for Perry Barr referred.
The Government would part company from the hon. Gentleman—I think that a good many would—when he suggested that it would be a good idea to have fishing expeditions on the basis of no evidence. He rightly argued that if somebody were to walk into a department store, help himself to some of the stock and walk out with it, he would rightly be prosecuted. It would be going too far to jump from that to suggest that it would be reasonable to believe that someone had pocketed some of the goods if there were no reason to come to that belief. It would be wrong to deem it the right and proper course to take to the police station on the off chance to search him, to make him turn out his pockets to ascertain whether he had pocketed goods. That would be going too far, and I think that the hon. Member for Perry Barr would be the first to accept that.
In some ways we must be harder on large corporations than on the private citizen. Their capacity for harm is much greater and their capacity to protect themselves is much greater, too. I accept that. However, fishing expeditions on the basis of no evidence would not be acceptable.
The hon. Member for Perry Barr may recollect that it is only recently that we have been legislating to protect ourselves against United States legislation, which would allow their enforcement authorities to go in for similar fishing expeditions in Britain on the basis of no evidence.
I ask the hon. Member for Norwood to accept that we have considerable sympathy with his argument. The Director General is faced with a difficulty with which we would like to deal. I hope that it will be possible to deal with it in a more comprehensive manner in a later Bill. I hope that once again I shall be able to persuade the hon. Gentleman to withdraw his clause. I am sorry to have to do so to such an extent—namely, to say that the Government accept the spirit of the clause but do not believe that this is the right place or the right way in which to

take action. However, I find myself once again in that position.

Mr. John Fraser: As long as the Minister recognises that the Opposition are much tougher in favour of competition than the Conservative Party, as long as he promises to do something in future and as long as he recognises the widespread racket that amounts in some instances to little more than a conspiracy to defraud local authorities, I am prepared to beg to ask leave to withdraw the motion.

Mr. Tebbit: I cannot promise that something will be done in the near future. To do so would be to go beyond what I have said. However, it will be possible to do something. I accept that there are difficulties. I am anxious to secure that competition is not impaired in the areas that we have been discussing if that can possibly be avoided.

Question put and negatived.

New Clause 7

REPORTS BY SECRETARY OF STATE

The Secretary of State shall in each calendar year lay before Parliament a report on the working of sections 3 to 13 of this Act and describing the resources of manpower and money devoted by his department to the cause of encouraging competition and restraining inflation.".—[Mr. Campbell-Savours.]

Brought up, and read the First time.

Mr. Campbell-Savours: I beg to move, That the clause be read a Second time.
The clause should commend itself to anyone who wants to see the Bill work. It is about the accountability of the Director General to Parliament—the machinery of prices and competition control. I am seeking to ensure that adequate resources are made available to the Department. It is by bringing the issue to Parliament and initiating a debate that we shall ensure that resources are made available. The clause will enable hon. Members to monitor the development of competition policy.
We all want the competition policy to work. It would be good if the policy on which the Government set such great store could be made to work in conditions of real genuine competition. I am sure that my hon. Friends would support the Government tonight if that were possible.


We do not believe that it is possible, and that is why we ask that an annual report be placed before the House to allow us to monitor the development of the Department.
We should, perhaps, question the extent of reduction in resources that would be made available to the Director General of Fair Trading. In Committee we were told that there would be a reduction of between 40 and 45 persons in the Office of Fair Trading and 50 in the Monopolies and Mergers Commission, and that about 450 would be displaced and otherwise deployed somewhere in the Civil Service as a result of the phasing out of the Price Commission. All that is to be done at a saving of £5½ million to the Exchequer.
What I am unable to understand is why the Chancellor, in his cuts, has demanded reductions of expenditure in such a vitally important Department. If the Government's intention were to make competition policy work, surely they would have ensured that there would be no cuts in an office vital to the successful conclusion of that policy.
In Committee the Minister for Consumer Affairs assured us that adequate resources were being made available. However, during the eighth sitting she let slip the following statement:
Of course, the Director General should and will consider any complaints—and on that I can assure the Committee—which seem to him to indicate an anti-competitive practice as far as it is practicable to do so within the resources that he has available in the Office of Fair Trading.
I replied by saying:
Finally, we have a suggestion that resources will determine whether an investigation will take place. I think this is a fairly major development because it implies that the law is applicable to some and not to others and that the law will be implemented on the basis of whether resources are available.
The Minister replied with a statement about the suggestion for 10 Director Generals, which totally misrepresented my case. She continued by saying that the Director General
will give due consideration to all the complaints that come to him, to which it is reasonable to expect him to give consideration".—[Official Report, Standing Committee B, 22 November 1979; c. 417–18.]
In other words, it would not be so much the need for real and genuine competition policy that would determine whether an investigation took place; it

would be determined in part by the amount of resources available to the Department. That undermines the whole principle embodied in the Bill—to promote the principles of competition policy.
My hon. Friends will be thinking of the parallels that exist. I am thinking of the police. When the Government allocate money to enable authorities to hire more policemen to pursue the application of law and order, that is a measure of the Government's intention on the application of law and order policies. Similarly, on competition policy—inasmuch as the Director General becomes what could be called a competition policeman—surely we can assess the commitment of any Government to competition policy on the basis of the amount of resources that they are willing to allocate to the Department responsible for policing law and order in that area.
Some may say that making the number of appointments that I wish to see available in the Office of Fair Trading could be termed an invasion of commercial freedom. It is no more an invasion of commercial freedom than the hiring of policemen in pursuit of a policy of general law and order is an invasion of individual freedom.
It is my belief that as time goes by the resources of the Department will be seen to be deficient. Indeed, the Office of Fair Trading will find that with the number of references that are made to it—certainly the Monopolies and Mergers Commission will find with the number of competition references made to it—that there will not be the level of resources necessary to carry out the kind of work that must be carried out if competition policy is to succeed.
9.30 pm
During the Committee proceedings, I for my own small part drew attention to a number of areas including the extension of credit, the abuse of hi-fi distributors, the question of leases—which I hope to raise later—the distortion of trade in the legal services, the question of profiteering and the operation of multinational companies, which was so effectively commented upon by my hon. Friend the Member for Vauxhall (Mr. Holland), who, unfortunately, is not here this evening. These are all areas that demand resources in the Department. They are all areas that demand investiga-


tion by the Director General of Fair Trading. They are only a very small number of incidents and activities by various bodies which I and my hon. Friends strongly feel should be brought to the attention of the Director General, and ultimately to the attention of the Monopolies and Mergers Commission, if competition policy in this country is to work.
In many ways the Bill seems to discount the need for effective resources. By introducing the Bill, the right hon. Lady and her hon. Friends have omitted a very important factor, which is that without resources the Bill simply will not work.
I return to the new clause itself. It would ensure that each calendar year the Secretary of State would lay before Parliament a report on the working of sections 3 to 13 of the Act, describing the resources of manpower and money devoted to that Department. The effect is simple. It will ensure that an annual debate takes place in this House on the effectiveness of the Government's competition policy. It will ensure that in future, if an insufficient effect stems from the application of the Government's competition policy, changes can be introduced.

Mr. Tebbit: I am afraid that I cannot persuade myself that the new clause is necessary. The Director General is already required to present an annual report on his own activities and those of the MMC. Obviously he will include the new activities under the Bill in those reports. To some extent we have discussed that already this evening.
The new clause would merely duplicate that existing provision by requiring the Secretary of State to produce a similar report. The Secretary of State is already fully answerable to Parliament for the Government's policies in these areas. Of course, as the hon. Gentleman will know, financial and manpower matters are described in the annual Estimates and other papers that are presented to Parliament. There are opportunities for parliamentary scrutiny both on the Floor of the House and in various Committees, and perhaps not least in the new Select Committees.
The new clause is misleading in implying that the promotion of competition

and the control of inflation could be the responsibility of any one Department. The Government as a whole must keep these objectives constantly in mind, and it is for every Minister in every Department to do so. To some extent, it may help the House and the hon. Gentleman if I say that there will be an increase of about 45 to 50 people working on competition matters in the staff of the OFT and an increase of the same order in the MMC. A reduction of about 530staff overall will occur in the Price Commission. We believe that the numbers we are deploying to the Office of Fair Trading and the Monopolies and Mergers Commission will be adequate to deal with the work which goes to those organisations. Naturally, like the police, they will not be able to make a full investigation of every complaint. We all know that the police cannot fully investigate every complaint; nor, indeed, can any other agency, however trivial it may be.
There may well be occasions when the Director General decides that he does not have the resources to deal with what he thinks are peripheral matters. But the resources that the Director will have at his command will be adequate to secure a great stiffening of competition policy, which is, as the hon. Member for Workington (Mr. Campbell-Savours) rightly said, the whole object of the Bill.

Mr. John Fraser: The new clause relates to resources inside the Department. Can the Under-Secretary tell us how many officials in his Department at the level of principal and above are employed to deal exclusively with competition policy?

Mr. Tebbit: I do not think that it will surprise the hon. Member for Norwood (Mr. Fraser) when I say that I cannot do that without notice. If I am able to, I will give the hon. Gentleman some indication later on, but I could not do it just off the cuff.

Question put and negatived.

Clause 1

ABOLITION OF PRICE COMMISSION

Amendment made: No. 2, in page I, line 15 leave out 'made by statutory instrument'.—[Mrs. Sally Oppenheim.]

Clause 2

ANTI-COMPETITIVE PRACTICES

Mr. Campbell-Savours: I beg to move amendment No. 4, in page 2, line 26 at end insert
'or the use of land in the United Kingdom or any part of it for the purposes of carrying on a business'.
This is an interesting amendment. Its objective is to strengthen the powers of the Director General of Fair Trading to intervene where restrictions on the use of land have the effect of restricting, distorting or preventing competition.
In Committee I drew a number of documents to the attention of the members of the Committee. Those documents stem from a number of years during which I was somewhat fascinated by this area of clear abuse.
I attended many trade exhibitions before I came to the House and it was a matter for discussion—not only amongst exhibitors but also amongst those who went with the intention of buying—that exhibitors were often not in a position to supply goods to retail customers because covenants were built into their leases which prevented them from selling and marketing certain products.
The leases of retailers were so framed that if the retailer tried to sell certain products the landlord would intervene, perhaps through the courts, to prevent him from doing so. The effect of such leases is to create what I would call a type of privileged commercial tenancy. I could equally describe it as a protective commercial tenancy. Competition is restricted, certainly in the shopping precincts where most of these leases are held. Such covenants also have the effect of ensuring a narrow choice of goods, because they restrict, within given shopping precincts, the number of retailers able to market certain products.

Mr. F. A. Burden: The area about which the hon. Member for Workington (Mr. Campbell-Savours) is talking is a comparatively restricted one. Usually, such a restriction is applied by a landlord who has a number of shops and, by agreement, he allows each shop to sell certain commodities. If other shops start to sell those commodities, the whole system breaks down and often those shops

get into trouble. But the aim of the landlord is to introduce a variety of shops and ensure their prosperity.

Mr. Campbell-Savours: I thank the hon. Gentleman for his comments. Indeed, he is correct. That may in part be the motive. But another product of taking such action is the distortion of trade. One is able to ensure higher profits for the retailer inasmuch as his trade is protected, and higher profits in a precinct invariably mean higher rentals. In Committee, I drew attention to a company which tripled the rents of its leases in a precinct. It was able to do so because of the regressive restrictions on the sale of certain products in that precinct.
The clause has the effect of preventing small retailers from diversifying in the range of goods that they are able to sell. I suggest that that is a restriction on the ability of many small retailers to expand their business.
I should like the House to consider what I have just said in the light of an article which will perhaps amuse the right hon. Lady. In Woman magazine on 5 January—the right hon. Lady may recall talking to the journalist and she may thank my wife for drawing it to my attention—regarding competition policy, the right hon. Lady said:
One of our top priorities must be to get price rises down by creating more free and open competition between goods, services and shops. Competition means choice—the more we consumers can pick and choose, the more manufacturers and shopkeepers will have to fight for our custom. That's why our Competition Bill to do away with restrictions on fairer, open trading will be so significant for the next decade and beyond.
The objective of the right hon. Lady and her right hon. Friends is to open competition between goods, services and shops. Therefore, I should have thought that the right hon. Lady and her right hon. Friends would welcome the amendment inasmuch as it helps the Director-General of Fair Trading by adding to or creating the powers necessary to ensure that he can intervene.
In Committee I quoted four examples. It would be wrong of me to detain the House by quoting them again, but I cannot resist the opportunity of drawing one—a very fine example—to the attention not only of Parliament but of people outside because it makes my argument.
This lease exists in Marylebone High Street in the heart of London. It is typical of much of the property in older precincts and High Streets where individual landlords have managed to buy up the majority of property. The restrictive covenant in the lease provides:
That no trade or business other than that next hereinafter mentioned or any manufacture whatsoever shall be carried on or suffered to be carried on upon the demised premises or any part thereof but that the demised premises shall be kept used and occupied as a retail licensed grocery and provision store and for no other purpose And without prejudice to the generality of the words and for no other purpose' the Tenant shall not permit or suffer to be used or exercised in or upon the demised premises the trade business or calling of a Butcher Purveyor of Meat Slaughter man Fishmonger Tallow Chandler Metter of Tallow Soap maker tobacco pipe maker or burner Smith Sugar Baker Fellmonger Dyer Distiller Farrier Blacksmith Common Brewer Coppersmith Working Brazier Pewterer Tin plate or Iron plate Worker Cooper Tripe Boiler Tripe Seller Fried Fish Shop Coal shed keeper or Vender of Coals Marine Store Dealer Rag or Fat Merchant Beater of Flax Auctioneer Tavern Keeper Vender of Malt liquor Coffee House Keeper Nursing Home Keeper Laundry Keeper Railway Parcel Booking Office Manufacturer of or Dealer in Motors or hirer out or keeper of Motors Massage Manicure or other Medical or Surgical or quasi-medical or quasi-surgical establishment Brothel or Bagnio keeper or any of them or any noisy or offensive trade or business whatsoever".
I shall stop at that point.
While leases such as that are in operation, and while they serve as grounds on which landlords can evict tenants, or certainly affect the kind of products they sell, I believe that a grave injustice is being done to much of retail trade, and that there is a great distortion of retail trade.

Mr. Burden: If a landlord has a property and he finds certain things offensive, not only to himself but to the public who live close by, has he no right to stop what he considers and what the public around may consider an objectionable trade?

Mr. Campbell-Savours: There may be a case for that, but there are planning laws which adequately govern it. I shall turn the question back. Does the hon. Gentleman feel that that is justifiable in a modern lease, where there are no such curious references to curious activities, and where orthodox products are excluded

from sale? Surely we can permit that if the objective is free and genuine competition—real competition in the High Street and precincts—whereby people are not restricted from selling reasonable and sensible products.
Of course, there is a quick buck in all this for the small precinct operator who introduces a term of variation. In Committee I drew attention to a particular lease where, in return for the words
delete as a retail licensed grocery and provision store. Insert instead for the retail sale of new glass, wood, ceramic, stone marble, plastic giftware",
a retailer paid the princely sum of £500 to his landlord because his landlord was unwilling to make a variation. At the end of that variation, he insisted on putting back into the lease for the future the words
as may be previously approved by the landlord".
In other words, it the tenant goes back to the landlord in the future and says that he wants a new variation of the lease, again he will have to pay, subject to the particularly high level of inflation, another £500 for that small variation.

Mr. John Fraser: May I pass on the advice that that premium was illegal under the Landlord and Tenant Act 1927?

Mr. Campbell-Savours: I always find the remarks of my hon. Friend most helpful. I thank him for his help in Committee.
How widespread is that abuse? I believe that it operates throughout the United Kingdom and that there is hardly a precinct in Britain where such leases do not exist in one form or another.
In Committee I mentioned a number of such leases, one of which the Director General of Fair Trading investigated. Because of the nature of the precinct, he was unable to satisfy me. Those leases exist in a number of major centres. I can give as examples the Arndale centre in the North-West and, to my pretty certain knowledge, the Whit gift centre at Croydon.
In fact, Mr. Deputy Speaker, within a matter of 200 yards from where you are sitting now, a number of these leases are in operation. Hon. Members who use Westminster underground station will be familiar with the parade of shops on


Bridge Street. I am told that it is owned by a Government Department. Today, before the debate, I went to see the shopkeepers in the Bridge Street parade and interviewed some of them. Those I interviewed told me that they had similar restrictions in their leases. I said to one of them "Will you do me a favour? Will you telephone your solicitor and ask if I can come round now in a cab, pick up the lease, bring it back and quote it at on Report of the Competition Bill in the House of Commons? "His answer was exactly what I expected; he said "No".
That has been the response, more or less, all the way down the line. People do not want to talk about this area of abuse. The reason why they do not want to talk about it is that invariably they benefit by it. They are the very people to whom I have been referring—the privileged, the protected, commercial tenants. That is what we are trying to change.
But, of course, those people have another interest. If they make too much noise, what will happen when the septennial review of rents on those properties takes place? The landlord will say "You caused me a bit of bother some years ago. This time I shall clobber you a bit more aggressively than I would otherwise." Hon. Members may be amused by that, but much of that kind of activity exists in business today, where there is a fair level of ruthlessness.
I should like to turn now to a matter with which I did not deal in any detail in Committee. I am worried about the circumstances in which there is a large supermarket in the precinct and that supermarket, by way of its connection with a property company, is able, through its holding company, to buy up the whole of that precinct and then interfere—because that is what it is—in the operation of the leases of the other tenants in that precinct. That is a clear abuse and a very clear attempt by a supermarket—or whatever retailer it may be—to distort trade. There is some evidence that companies, recognising the problems of acute and strong competition within given retail areas, are endeavouring, through associated companies, to buy what in effect is a right, a licence, to distribute certain products within those given areas.
I hope that the Director General of Fair Trading will make every effort, within the limited resources about which

I commented on new clause 7, to establish whether this is going on. If it is going on, I hope that he will refer it to the right hon. Lady, so that she and her right hon. Friend the Secretary of State can bring forward the subsequent legislation that we have all been promised during the debates on the Bill.
I am not altogether sure that the Government have the will to introduce the kind of legislation into this area that I should like to see. I draw my view from the statement of the Under-Secretary of State for Trade, who said:
I believe that it would be incredibly difficult to split in a reasonable manner the sector which was for accommodation and that which was for business leases. We shall certainly look at the matter again. The most pressing area is to see whether we can do something about caravans rather than business leases."—[Official Report, Standing Committee B, 20 November 1979; c. 364.]
The area that I have mentioned is of vital importance. It is of national importance and it is generally regarded as an abuse by much of the British retail trade. It is certainly an abuse within the terms of the competition policy that is before the House, and I appeal to the Government to step in and take action as a matter of urgency.

Mr. Tebbit: We are all indebted to the hon. Member for Workington (Mr. Campbell-Savours) for a little light relief in the remarkable list of things that lessees may not do in some parts of the country. I had thought that one could start a tailor's shop in the area. It must be good news to some nearby residents that there is someone on hand, other than law enforcement and planning agencies, to prevent some of the uses given in the list. I am not sure that many of us would want to live next door to a massage parlour or to several other potential uses that have been ruled out. However, in a way I wish that my right hon. Friend the Minister was replying to the debate.

Mr. John Fraser: So do I.

Mr. Tebbit: I am glad that the hon. Member for Norwood (Mr. Fraser) and I are in agreement about something. My right hon. Friend shops in Marylebone High Street, so that is her local shopping area.

Mr. Fraser: Not in Harrods?

Mr. Tebbit: Harrods is within a reasonable taxi drive of Marylebone


High Street. Whatever the leases say, I am told that there are no fewer than four grocers and three butchers within a small shopping area. Clearly, it is not that effective in restraining competition. A number of other agencies seek to limit competition in such a way.
The hon. Member for Workington may be familiar with the fact that it is the policy of new town development corporations to limit competition in shopping precincts in order to be given better service to those living in the area. He will also be familiar with the way in which new towns will often reserve a site in their High Street for a supermarket or for a particular type of shop. Presumably, that might be held to be a restraint on competition, but it is commonly indulged in and has a good deal of merit. In theory, perhaps the new town development corporation should leave the site open, bat the advantage of having a major chain store in a shopping centre—particularly a developing centre—is of benefit to all concerned.
However, I do not dismiss all that the hon. Member for Workington said. There are areas that might be investigated. The Director General can look at the conditions in a particular shopping precinct, and I think that that is right. I stand by what I said earlier, in Committee, namely, that one of the more pressing areas for action was that of protection for those who live on caravan sites. I had therefore expected to return to that point.
I should like to tell the House what we have been doing since the end of the Committee stage. I confirm that it is our intention to table an amendment that will bring within the scope of the anti-competitive practice provisions relating to the supply of a site for a holiday caravan and provisions for certain types of car parking facilities. That will please my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). As the hon. Member for Norwood will know from his experience, it is an area full of difficulties. We have not, therefore, been able to table an appropriate amendment this evening, but we hope to do so when the Bill is discussed in another place.
I realise that it may be held that I have not said a great deal more tonight

than I did in Committee. However, I assure the House that we have made a good deal of progress in dealing with the problems of caravan sites and car parking. Although problems remain to be resolved, we hope to be able to do that in time to table an amendment in another place. As hon. Members will be aware, a number of their Lordships have taken an interest in those two problems—

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Competition Bill may be proceeded with, though opposed, until any hour and that the Motion relating to the European Court of Justice may be proceeded with, though opposed, until half-past Eleven o'clock or for one and a half hours after it has been entered upon, whichever is the later.—[Mr. Le Marchant.]

COMPETITION BILL

Question again proposed, That the amendment be made.

Mr. Tebbit: Although it is a pity that we have not been able to introduce our amendment in this House, I am sure that it will be thoroughly considered in another place. I hope, therefore, that the House will be satisfied on those points, although I may not have satisfied the hon. Member for Workington on the problems that he raised. I believe that they are not as great as he expects, but there is no reason why we should not continue to encourage competition wherever we can, although we must beware of removing all restraints on leases, for example, on business leases, many of which are welcome to all parties, including the consumers.

Mr. Campbell-Savours: On what basis?

Mr. Tebbit: For example, in a new town it could well be held to be a restraint to insist that a particular site was not available for any company other than one of the major chains to come in and help promote the entire shopping centre. I believe that the same is probably true of some of the precincts in neighbourhood shopping centres in new towns. I do not believe that we should assume that everything is quite as black and sinister as the hon. Gentleman supposes.

Mr. John Fraser: The hon. Gentleman's remarks about an amendment concerning caravans are welcome. He will know that for a long time I have tried to bring about an improvement in that area. The licensing of caravan sites and certain other uses of land are highly restrictive and anti-competitive. It is clearly anticompetitive and anti-social to tie the use of a site to the purchase of a caravan from the site owner. It operates against those, incidentally, who spend their holidays in this country, and that is also a bad thing.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) made the point about the user clause in leases, and that is a serious problem, which I realise is not easy of solution. Such occupations as a fell monger, a tallow dealer or a slaughterer would not be welcome in Marylebone High Street or next door to any of us. However, there remains a problem. There is not even a right to change the user to another reasonable user or incidental user.
It might be possible for the Department of Trade to examine the problem with whichever other Government Department is responsible and consider revising the Landlord and Tenant Act 1927. If a lease has a provision that it cannot be assigned, that Act reads into the clause that consent to an assignment shall not be unreasonably withheld. There could be a change in the law so that where there is an absolute prohibition on a change of user it shall be implied in a business lease that a request for change of user will not be unreasonably refused. That might be the solution. It would leave the landlord with his discretion, and it would introduce a degree of flexibility that operated in favour of the kind of user that my hon. Friend the Member for Workington mentioned—the business man who wants to change his trade because of a change in trading patterns.
I have come across leases which provide that premises can be used only as a dairy and which were drawn up at a time when butter was ladled out and people bought their milk from cans. That is a user clause that is wholly obsolete and the continuation of which would be a totally unreasonable restriction on ability to trade.
The solution may lie in amending the Landlord and Tenant Act in that respect. Can the Minister undertake to consider that? I do not ask him to take action, because he needs the consent of other Departments. It is a problem that has so far defied solution, but a solution might lie in that direction.

Mr. Tebbit: I am grateful to the hon. Member. I assure him that my respect for his knowledge in this area is considerable and, therefore, when he makes a suggestion such as he has just made, springing from his experience as a Minister and his interest in housing matters and the relationship between landlord and tenant, I am bound to take it seriously.
I am willing to undertake to ask my officials to think about what he has said and consider the possibilities of proceeding in that direction. But one encounters a veritable thicket when one proceeds along the lines that have been discussed this evening.

Amendment negatived.

Mr. Tebbit: I beg to move amendment No. 5, in page 3, line 2, leave out 'particular persons or' and insert
'a particular class of persons or to'.
I can be much more positive about this amendment and move i1 formally. I believe that the House will accept it because it is very sound.

Amendment agreed to.

Amendments made: No. 6, in page 3, line 8, after Director ', insert—
'General of Fair Trading (in this Act referred to as "the Director")'.

No. 7, in page 3, leave out lines 15 to 18.—[Mr. Tebbit.]

Mr. John Fraser: I beg to move amendment No. 9, in page 3, line 32, at end add—
'(9) In subsection (1) of this section the words "in the course of business" shall be taken to include the acquisition of goods or the securing of services by a local authority, health authority or other person notwithstanding that the person so acquiring or securing does not otherwise act in the course of business.'.
This amendment, which was moved in Committee, deals with the problems of local authorities with restricted tender lists. I give one example which came to me in my capacity as a solicitor. A local authority has a limited list of tenderers


for demolition contracts. A man, who represents himself as being a highly competitive demolition contractor, finds that he is on the lists of many local authorities but not on the list of a particular authority. He complains that he could introduce an element of competition to that particular trade which, he alleges, is absent. I am no judge of whether he is right or wrong, but that is not the point. From that example I began to realise that there are many occasions on which local authorities—perhaps as a result not of malice but of lack of thought—restrict their lists of tenderers. Perhaps they have historic lists and do not wish to add to them or vary them. That can be an inhibition on competition and can operate against the interests of the ratepayers in the borough.
I have tabled this amendment to ensure that tender lists and like trading arrangements are open and competitive. The amendment is necessary because the Bill talks about a person acting in the course of business. A hospital authority or a local authority may discharge many of its functions not in the course of business—they are purely social or welfare functions. However, the purchasing power of such authorities is highly relevant to the commercial atmosphere, and that is why the amendment is necessary. If the amendment cannot be accepted in the terms in which it is drafted, perhaps the Minister can say something helpful about what might happen elsewhere.

Mr. Tebbit: I think I can make some helpful noises. In Committee, when we discussed amendment No. 13, which was identical to this, my right hon. Friend said that she was ready to look at its principle. Although we are not yet ready to come forward with a Government amendment, I can tell the House our general policy in this area and I can assure the hon. Member that we intend to bring forward an amendment to give effect to it in due course.
We accept that the acquisition of goods and services by local authorities should be brought within the scope of this part of the Bill. However, there is one important point that has delayed the drafting of our amendment to which we shall wish to give further careful thought. This relates to the use of selective tender procedures. We do not wish to extend the scope of

the Bill in such a way that the principle of selective tenders is in any way undermined.
In theory and in practice, they can be useful in the interests of economy and of securing reliability and quality, and as such the practice has been encouraged by successive Governments. However, selective tender procedures are capable of being abused. They may be unnecessarily restrictive or they may in certain cases be operated very cosily to limit competition, or worse—that is the point which the hon Gentleman makes. We want such abuses to be capable of being examined. The distinction is not one that is easy to incorporate in legislation, so we still wish to consider precisely how to proceed.
I hope that in the light of what I have been able to say—because once again I think that hon. Members on both sides of the House are pointing generally in the same direction—the hon. Gentleman will be able to agree to ask leave to withdraw his amendment.

Mr. John Fraser: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3

PRELIMINARY INVESTIGATION BY DIRECTOR OF POSSIBLE ANTI-COMPETITVE PRACTICE.

Amendments made: No. 11, in page 4, line 12, leave out 'made by statutory instrument'.

No. 12, in page 4, line 16, leave out from 'authenticity' to end of line 18.—[Mrs. Sally Oppenheim.]

Clause 4

UNDERTAKINGS IN CONSEQUENCE OF DIRECTOR'S REPORTS

Mrs. Sally Oppenheim: I beg to move amendment No. 14, in page 6, line 19, at end insert—
'(a) to arrange for any undertaking accepted by him under this section to be published in such manner as appears to him to be appropriate.'.

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this amendment it will be convenient to take Government amendments Nos. 15, 18 and 40.

Mrs. Oppenheim: I was asked in Committee to give an assurance that all undertakings received by the Director General under the Bill would be published. I am sure that this would be his practice in any event, and he will be encouraged to do so by the terms of clause 18. However, I see no harm in introducing a stronger requirement to this effect, and that is the purpose of this amendment.

Amendment agreed to.

Amendment made:No. 15, in page 6, line 20, leave out from 'any' to 'and' in line 21 and insert such undertaking'.

No. 16, in page 7, line 14, leave out 'made by statutory instrument'.

No. 17, in page 7, line 18, leave out from 'authenticity' to end of line 20.—[Mrs. Sally Oppenheim.]

Clause 9

UNDERTAKINGS FOLLOWING REPORT ON COMPETITION REFERENCE

Amendment made:No. 18, in page 13, line 24, at end insert—
'(aa) to arrange for the undertaking to be published in such manner as appears to him to be appropriate;'.—[Mrs. Sally Oppenheim.]

Clause 10

ORDERS FOLLOWING REPORT ON COMPETITION REFERENCE

Amendment made:No. 19, in page 15, leave out lines 7 to 10.—[Mrs. Sally Oppenheim.]

Clause 11

REFERENCES OF PUBLIC BODIES AND CERTAIN OTHER BODIES CORPORATE TO THE COMMISSION

Mrs. Sally Oppenheim: I beg to move amendment No. 20, in page 15, line 26, leave out 'to consumers'.
This clause enables the Secretary of State to refer to the Commission a question about the service provided to consumers by a public body. Clause 24 defines consumers by reference to section 147 of the Fair Trading Act. This definition excludes a person who receives goods or services by way of business,

and for the purpose of clause 11 this is too restrictive.
Without this amendment, the Secretary of State would not be able to refer to the Commission a question about a public body's service to the business community, and such a restriction might prove to bear particularly harshly on small businesses. That is not our intention, and the amendment therefore removes the words "to consumers" and allows a question to be put to the Commission dealing with a service provided to any person.

Amendment agreed to.

Amendment made: No. 24, in page 16, line 36, after '(a)' insert
'any question relating to the appropriateness of'.—[Mrs. Sally Oppenheim.]

Mrs. Sally Oppenheim: I beg to move amendment No. 25, in page 16, line 40, leave out from beginning to end of line 3 on page 17 and insert—
'(b) the question whether any course of conduct required or envisaged as mentioned in section 2(2) above operates against the public interest'.

Amendment No. 24, which was taken earlier when we debated new clause 3, tightened up the wording in clause 11 (6)(a) following my assurance in Committee that the drafting would be reconsidered. This amendment deals with the provisions in clause 11(6)(b).

Whilst, therefore, the Commission is to be prevented from criticising or questioning any agreement registrable under the Restrictive Trade Practices Act, it will nevertheless be able to mention and refer to such agreements in its reports.

Amendment agreed to.

Mrs. Sally Oppenheim: I beg to move amendment No. 26, in page 17, line 22, at end insert—
'and where the Commission conclude that the body specified in the reference is pursuing a course of conduct which operates against the public interest, the report may include recommendations as to what action (if any) should be taken by the body for the purpose of remedying or preventing what the Commission consider are the adverse effects of that course of conduct.'.
The amendment is intended to allow the Commission to make recommendations about what action, if any, should be taken by the body being investigated to


remedy or prevent the adverse effects on which the Commission has reported. The Commission will be able to make these recommendations only where it considers that a body has been pursuing a course of conduct which operates against the public interest. The provision is broadly comparable with that contained in clause 8(4)(b), which deals with the Commission's recommendations following the competition reference.

Amendment agreed to.

Clause 12

ORDERS FOLLOWING REPORT UNDER SECTION 11

Amendment made: No. 52, in page 17, line 25, leave out from beginning to end of line 5 on page 18.—[Mrs. Sally Oppenheim.]

Clause 15

ORDERS CONCERNING AGRICULTURAL SCHEMES

Mrs. Sally Oppenheim: I beg to move amendment No. 35, in page 20, line 12, at end insert—
'(2) Where the report of the Commission on a competition reference concludes that a board administering a scheme under the said Act of 1958 was engaging in an anti-competitive practice which operated or might be expected to operate against the public interest, the Secretary of State shall not exercise any function under section 9 above except acting jointly with the Minister who by virtue of that conclusion has power to make an order under section 19 of that Act and, in its application in such a case, section 9 above shall have effect as if the references in it to the Secretary of State (except the second reference in subsection (6)) were references to both the Secretary of State and the Minister.'.
Under the provisions of the clause, the power to make an order following a report of the Monopolies and Mergers Commission concerning an agricultural marketing board rests with the Minister responsible for that scheme. It was argued in Committee by my hon. Friend the Member for Northwich (Mr. Good-lad) that the same Minister, normally the Minister of Agriculture, Fisheries and Food, should also be responsible for the immediate follow-up to the report. We certainly accept that it would be desirable for the Agriculture Minister concerned to be involved at this stage. The amend-

ment therefore provides that the relevant Agriculture Minister will be jointly involved with the Secretary of State in making any request to the Director General of Fair Trading to enter into negotiations with the marketing board.

Amendment agreed to.

Clause 16

GENERAL PROVISIONS AS TO REPORTS

Amendments made: No. 36, in page 20, line 19, leave out their opinion 'and insert—
'the opinion of the Commission or the Director, as the case may be'.

No. 37, in page 20, line 26, leave out their opinion' and insert—
'the opinion of the Commission or the Director, as the case may be'.—[Mrs. Sally Oppenheim.]

Clause 17

LAYING BEFORE PARLIAMENT AND PUBLICATION OF REPORTS

Amendments made: No. 38, in page 20, line 32, after '(1)' insert—
'Subject to subsection (1A) below'.

No. 39, in page 20, line 35, at end insert—
'(1A) The Secretary of State shall not lay a copy of a report made to him under section 8(1) or 11(8) above before either House of Parliament unless at least twenty-four hours before doing so he has transmitted to every person or body specified in the reference a copy of the report in the form in which it is laid (or by virtue of subsection (2) below is treated as being laid) before each House of Parliament.'.—[Mrs. Sally Oppenheim.]

Clause 18

INFORMATION AND ADVICE ABOUT OPERATION OF ACT

Amendment made: No. 40, in page 21, leave out lines 29 and 30.—[Mrs. Sally Oppenheim.]

Clause 20

MODIFICATION OF PROVISIONS ABOUT PERFORMANCE OF COMMISSION'S FUNCTIONS.

Amendment made: No. 41, in page 23, leave out lines 25 to 28.—[Mrs. Sally Oppenheim.]

Clause 23

FINANCIAL PROVISIONS

Mr. Tebbit: I beg to move amendment No. 42, in page 25, line 27, leave out 'or the Director'.

Mr. Deputy Speaker: With this amendment it will be convenient to take Government amendments Nos. 43 and 57.

Mr. Tebbit: The purpose of amendments Nos. 42 and 43 is to ensure that the expenditure of the Director General of Fair Trading on his various functions is clearly and explicitly authorised. We have already discussed matters that are rather parallel. The payment of public funds to the Office of Fair Trading is authorised in general terms by the annual Appropriation Acts. But it is an established practice, if not essential, for each statute involving expenditure to make clear whether it is to be met out of money provided by Parliament.
In consideration of the Competition Bill, it has been discovered that earlier legislation affecting the Director General is not of itself entirely clear on this point. We are, therefore, taking this opportunity to clarify the position. Amendment No. 57 inserts into the long title of the Bill a reference to the amendment relating to powers to make grants to certain bodies and the amendments to sections 83 and 135 of the Fair Trading Act.

Amendment agreed to.

Amendment made: No. 43, in page 25, line 31, at end insert—
'(2) In section 135(2)(c) of the Fair Trading Act 1973 (which provides for any expenses duly incurred by the Director or his staff in consequence of the provisions of that Act to be defrayed out of moneys provided by Parliament) for the words "of this Act" there shall be substituted the words "of this or any other Act".'—[Mr. Tebbit.]

Clause 24

SHORT TITLE, INTERPRETATION, REPEALS, COMMENCEMENT AND EXTENT

Amendments made: No. 44, in page 25, line 36, leave out 'and 23'.

No. 45, in page 25, line 37, at end insert
'and for ease of reference the expressions which are used in those sections and have

meanings assigned to them by the said section 137 are listed in subsection (2A) below.
(2A) The expressions mentioned in subsection (2) above are:—

"the Act of 1967"
"agreement"
"business"
"the Commission"
"consumer"
"enactment"
"goods"
"group"
"group of inter-connected bodies corporate"
"inter-connected bodies corporate"
"Minister"
"monopoly situation'
"practice'
"price"
"services'
"supply"
"the supply of services".'.

No. 47, in page 26, line 2, leave out 'made by statutory instrument'.

Title

No. 57, in title, line 8, leave out 'modification of' and insert—
making of grants to certain bodies; to amend and provide for the amendment of sections 83 and 135 of and'.—[Mrs. Sally Oppenheim.]

Motion made, and Question proposed, That the Bill be now read the Third time.

Mr. John Smith: Before the House parts company with the Bill we should reflect on what we are doing. One of the features of the Government noticed by those who study legislation is the use of misleading titles for much of the legislation. This Bill is no exception. It is about the abolition of price controls. The Price Commission is abolished. The only reference in the Bill to the Government's capacity to control unjustified price increases appears in clause 13. That gives power to the Secretary of State to refer to the Director-General an unjustified price increase that he may investigate. But this is hedged about with qualifications. It has to be a matter of major public concern. It must be of general economic importance.
The Secretary of State will find it easy not to make any references under this heading. It is unlikely that any references will be made. Even if the Secretary of State did decide to make a reference, there is precious little that he can do if an unjustified price increase is discovered. As I read the Bill, all that can happen


is that a certain amount of publicity would be given to the fact that the Director General had made such a finding. Any power of the Government to control unjustified price increases, discovered in the past by the Price Commission or now by the Director General, is wiped out. The real title for the Bill should not be the Competition Bill but the Abandonment of Counter-Inflation Policy Bill.
Our debates today and those in Standing Committee have shown that the Government do not possess a counter-inflation philosophy, policy or strategy. The damage started with the doubling of VAT from 8 per cent. to 15 per cent. There occurred contemporaneously the abolition of the Price Commission. We have since seen escalating price increases. We are at the moment on a most unfortunate price inflation escalator. I am sure that connoisseurs who read Hansard will enjoy the explanation given by the Minister for Consumer Affairs about the Government's attitude to gas price increases in which she said, as I understood her, that the Government were acting as a moderating influence and that if gas were under private control the increases would be much more severe. I dare say that may be true. It is just as well that the previous Government took power to make British Gas Corporation a monopoly purchaser for gas in the North Sea. We would otherwise no doubt be paying the sort of prices paid for oil. That was a wise exercise of nationalisation. It was also wise of us to take into public ownership the oil under the North Sea.
Those hon. Members who did not have the privilege of listening to the Minister's explanation of the Government's attitude to the gas price increases should read Hansard. She made an entertaining contribution.
The Government have added 10 per cent. to the rate of inflation, and the gas price increases indicate Government thinking about counter-inflation. There is an energy case to be weighed against the counter-inflation case. I am afraid that the Ministers responsible failed in their duty to thrash that out properly in the Government. As a result, another savage price increase will affect many poor people who are particularly vulner-

able to energy price increases. It is hard to avoid buying energy, since it is one of the essentials of life. In the policy announced last week the Government indicated how genuine is their desire to counter inflation.
That is a pity, because we have gone a long way in educating the public about the importance of counter-inflation. Under the last Labour Government, there was a wider and deepening understanding of the paramount need to bring down the inflation rate below that of our major competitors. Today we have the highest inflation rate of all the Western industrialised countries. The rate shows no sign of diminishing and the Government have no power to deal with it. For that reason, we shall vote against the Bill's Third Reading.

Mr. loan Evans: It is astonishing that on Second Reading, in Committee on Report and on Third Reading the Government failed to describe a policy for prices. The Conservatives were elected on the basis of their promises for dealing with the cost of living and prices. Now they say that market prices are sufficient. The Government are sitting on the sidelines in the steel strike. Apparently they will not allow market forces to operate in the steel industry and yet they have deliberately intervened in order to increase prices.
The catalogue of price increases caused by Government policies can be seen by all in Hansard. Those increases were not in the pipeline when the previous Government were in office. They have been caused by VAT, the Budget and nationalised industry prices. The Government have intervened to increase those prices.
The previous Conservative Government proposed similar policies but they realised that they must change them. They introduced the Price Commission and a counter-inflation policy. They tried to deal with incomes. Inflation has risen to l7· per cent. and now threatens to reach 20 per cent. What will the Government do to assure working people who are trying to retain their living standards? They can see their standards being reduced by the Government. An increase in prices will lead to an increase in wages.
I urge the Government to think again and to come forward with a constructive


policy for prices. If they do not do that, their difficulties will become worse in the months and years ahead.

Mrs. Sally Oppenheim: We are approaching the end of our consideration of the Bill. We have discussed it at great length and in great detail both in the Chamber and in Committee. I do not intend to speak at length now.
Although we have discussed the Bill exhaustively, and at times exhaustingly, the discussion has not always firmly focused on the real issues. We have discussed multinational companies, leasehold reform, transfer pricing and taxation. We have discussed prices endlessly. At times I felt that we had discussed everything except competition. Whatever Labour Members may say, competition is the central issue of the Bill.
I shall conclude our consideration of the Bill by bringing the attention of the House back to the central issue of competition and its importance for the economy. Competition is an essential ingredient for a dynamic economy. It is the cornerstone of consumer sovereignty. It maintains and increases choice, lowers prices and raises standards. It is a spur to greater efficiency and innovation. Competition aids the process of adaptation to meeting changing demands and changing situations. It has a profound influence on prices and profits. One of the most important functions of competition is to act as a restraint on pricing decisions, ensuring that firms do not take the easy way to higher profits by producing a smaller output at a higher price.
The role of competition in a dynamic society is essential. If, as a nation, we fail to recognise the need for adaptation and adjustment to the challenge of a rapidly changing world economy, we shall sink deeper into the relative economic decline. It is vital that we learn to adapt quickly to changing patterns of consumer demand, changing methods of production and the introduction of entirely new types of product if we are not to decline into a provincial backwater.
Competition is an important safeguard for consumers, but it has wider economic implications. The strengthening of competition policy in this measure will also benefit many smaller businesses that may

suffer from the effects of some of the very practices that the Bill is aimed at preventing. It could help them, too, in their dealings with public sector industries, in terms of the services provided and of the practices that may be affecting them adversely.
The larger enterprises in the economy must take care not to become ossified. Although large enterprises are vital to the economy, it is also vital that new and energetic smaller enterprises are able to get a foothold in the market.
The economic system must provide the incentives to encourage the adaptability that I have been urging. The Government can play an important role in creating the right framework for incentives. All too often Governments have done the reverse, namely, putting barriers in the way of initiative and enterprise, suppressing incentives and distorting the economy through arbitrary controls. The Government have already shown their determination to break away from such short-sighted policies. We have reduced controls and increased incentives.
The Competition Bill is part of that general approach. It removes the artificial distortions of an ineffective price control policy imposed by the previous Government. It provides the means of removing obstacles and distortions created by enterprises themselves. We do not deny that even in a free market economy some problems of that nature may arise.
The powers in the Bill enabling the Director General and the Monopolies and Mergers Commission to investigate anti-competitive practices in both the public and private sectors are intended to strengthen the pro-competitive forces at the expense of the anti-competitive. These powers provide a new, swifter and highly flexible instrument for that purpose. Indeed, the hon. Member for Norwood (Mr. Fraser) himself, in speaking of this aspect of the Bill in Committee, described it as revolutionary and beneficial in terms of competition policy.
The Bill also provides new powers to prevent anti-competitive practices on the part of public sector industries, new powers to pursue uncompetitive practices in the case of local monopolies more easily, and, last but not least, new powers to investigate and report on efficiency and standards of service in public sector in-


dustry. There is the power for sponsoring Departments, in consultation with the Secretary of State, to require certain action arising out of the reports.
When the Bill receives Royal Assent, the first of the references, the London commuter services of British Rail, will be made. It is an important new measure of consumer protection and represents a significant advance in the sector of competition policy.
The Opposition have made a great deal of the fact that the Bill will mean the end of the Price Commission. They say that we do not have a strategy and that we have not put plans forward. We have seen their strategy and what it did, and we have no intention of repeating their mistakes. I do not intend to prolong the debate in order that, once again, we debate something that we have debated almost ad nauseam already.
As a result of the abolition of the Price Commission, the distribution of responsibility among Ministers for issues concerning prices is affected. It means that my right hon. Friend has no general responsibilities for prices in future. Prices issues will normally be handled by the Ministers responsible for the policies to which they relate.
Finally, we do not make any claims—

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. I cannot allow several hon. Members to be on their feet at once.

Mrs. Oppenheim: We do not make any claims such as those made by the

Opposition so often and so fraudulently when in Government. We do not claim that the Bill is the final answer to inflation or that its benefits will be felt overnight. We claim that it is a useful new measure, which will give considerable impetus to competition policy. To ensure that it is implemented vigorously and consistently, we are strengthening the Office of Fair Trading and the Monopolies and Mergers Commission. It is a measure that will certainly benefit consumers in the longer term to a far greater extent than the Act that we have repealed. I commend the Bill to the House.

Mr. John Fraser: The Minister, towards the end of her speech and the proceedings of the Bill, has committed an act of parliamentary cowardice. Despite what she said in Committee, she saved to the last second telling the House that she is trying to disown responsibility for answering questions and dealing with matters on prices and inflation.
During the course of the Committee proceedings, she told us that every Minister in the Government would be responsible for restraining inflation. Apparently there is now one exception—the Minister for Consumer Affairs. It is a disgrace. It is the wrong way to treat the House to leave it until the last seconds of the debate—when she thought that she would not be questioned—to abdicate, as we always thought that she would, the responsibilities that the title of her office presumes.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 178, Noes 130.

Division No.143]
AYES
[10.37 pm


Alexander, Richard
Bradford, Rev. R.
Clark, Hon Alan (Plymouth, Sutton)


Alton, David
Bright, Graham
Clark, Sir William (Croydon South)


Aspinwall, Jack
Brinton, Tim
Clarke, Kenneth (Rushcliffe)


Atkins, Robert (Preston North)
Brooke, Hon Peter
Cockeram, Eric


Atkinson, David (B'mouth East)
Brown, Michael (Brigg &amp; Sc'thorpe)
Colvin, Michael


Banks, Robert
Browne, John (Winchester)
Crouch, David


Beaumont-Dark, Anthony
Bruce-Gardyne, John
Dickens, Geoffrey


Beith, A. J.
Buck, Antony
Dorrell, Stephen


Benyon, Thomas (Abingdon)
Budgen, Nick
Douglas-Hamilton, Lord James


Benyon, W. (Buckingham)
Butcher, John
Dover, Denshore


Berry, Hon Anthony
Butler, Hon Adam
Dykes, Hugh


Best, Keith
Cadbury, Jocelyn
Eggar, Timothy


Bevan, David Gilroy
Carlisle, John (Luton West)
Fairgrieve, Russell


Biggs-Davison, John
Carlisle, Kenneth (Lincoln)
Faith, Mrs Sheila


Blackburn, John
Carlisle, Rt Hon Mark (Runcorn)
Fenner, Mrs Peggy


Bonsor, Sir Nicholas
Chalker, Mrs. Lynda
Finsberg, Geoffrey


Boscawen, Hon Robert
Chapman, Sydney
Fletcher, Alexander (Edinburgh N)


Boyson, Dr Rhodes
Churchill, W. S.
Fookes, Miss Janet




Fraser, Peter (South Angus)
Mather, Carol
Shepherd, Colin (Hereford)


Garel-Jones, Tristan
Mawhinney, Dr Brian
Shepherd, Richard(Aldridge-Br'hills)


Glyn, Or Alan
Maxwell-Hyslop, Robin
Silvester, Fred


Goodhew, Victor
Mellor, David
Sims, Roger


Gorst, John
Meyer, Sir Anthony
Skeet, T. H. H.


Gow, Ian
Miller, Hal (Bromsgrove &amp; Redditch)
Smith, Cyril (Rochdale)


Gower, Sir Raymond
Mills, lain (Meriden)
Speed, Keith


Greenway, Harry
Mills, Peter (West Devon)
Speller, Tony


Griffiths, Eldon (Bury St Edmunds)
Miscampbell, Norman
Spicer, Michael (S Worcestershire)


Griffiths, Peter (Portsmouth N)
Moate, Roger
Sproat, lain


Hannam, John
Molyneaux, James
Stanbrook, Ivor


Haselhurst, Alan
Morrison, Hon Charles (Devizes)
Stanley, John


Havers, Rt Hon Sir Michael
Morrison, Hon Peter (City of Chester)
Stevens, Martin


Hawkins, Paul
Murphy, Christopher
Stewart, John (East Renfrewshire)


Hawksley, Warren
Myles, David
Strading Thomas, J.


Hayhoe, Barney
Neale, Gerrard
Tebbit, Norman


Heddle, John
Needham, Richard
Temple-Morris, Peter


Henderson, Barry
Nelson, Anthony
Thompson, Donald


Hicks, Robert
Newton, Tony
Thorne, Neil (Ilford South)


Hill, James
Onslow, Cranley
Thornton, Malcolm


Hordern, Peter
Oppenhelm, Rt Hon Mrs Sally
Townend, John (Bridlington)


Howells, Geraint
Page, John (Harrow, West)
Trippier, David


Hunt, David (Wirral)
Parris, Matthew
Vaughan, Dr Gerard


Hunt, John (Ravensbourne)
Patten, Christopher (Bath)
Viggers, Peter


Johnson Smith, Geoffrey
Patten, John (Oxford)
Wainwright, Richard (Colne Valley)


Jopling, Rt Hon Michael
Penhaligon, David
Wakeham, John


Kellett-Bowman, Mrs Elaine
Percival, Sir Ian
Walker, Bill (Perth &amp; E Perthshire)


Kershaw, Anthony
Pink, R. Bonner
Waller, Gary


Langford-Holt, Sir John
Pollock, Alexander
Ward, John


Latham, Michael
Porter, George
Warren, Kenneth


Lawrence, Ivan
Powell, Rt Hon J. Enoch (S Down)
Watson, John


Le Marchant, Spencer
Price, David (Eastleigh)
Wells, Bowen (Hert'rd &amp; Stev'nage)


Lennox-Boyd, Hon Mark
Proctor, K. Harvey
Wickenden, Keith


Lloyd, Peter (Fareham)
Raison, Timothy
Wilkinson, John


Loveridge, John
Rathbone, Tim
Winterton, Nicholas


Lyell, Nicholas
Rhodes James, Robert
Wolfson, Mark


McCusker, H.
Rhys Williams, Sir Brandon
Young, Sir George (Acton)


Macfarlane, Neil
Ridley, Hon Nicholas
Younger, Rt Hon George


MacGregor, John
Rifkind, Malcolm



MacKay, John (Argyll)
Ross, Wm. (Londonderry)
TELLERS FOR THE AYES


Major, John
Sainsbury, Hon Timothy
Mr. John Cope and


Marlow, Tony
St. John-Stevas, Rt Hon Norman
Mr. David Waddington.


Mates, Michael
Shelton, William (Streatham)





NOES


Allaun, Frank
Dunn, James A. (Liverpool, Kirkdale)
Lyons, Edward (Bradford West)


Anderson, Donald
Dunwoody, Mrs Gwyneth
McCartney, Hugh


Archer, Rt Hon Peter
Eadle, Alex
McElhone, Frank


Armstrong, Rt Hon Ernest
Eastham, Ken
McGuire, Michael (Ince)


Ashton, Joe
Ellis, Raymond (NE Derbyshire)
McKay, Allan (Penistone)


Atkinson, Norman (H'gey, Tott'ham)
Evans, loan (Aberdare)
MacKenzie, Rt Hon Gregor


Bagier, Gordon A. T.
Evans, John (Newton)
McWilliam, John


Bennett, Andrew (Stockport N)
Field, Frank
Marshall, David (Gl'sgow, Shettles'n)


Booth, Rt Hon Albert
Flannery, Martin
Maynard, Miss Joan


Boothroyd, Miss Betty
Fletcher, Ted (Darlington)
Mikardo, Ian


Bray, Dr Jeremy
Foot, Rt Hon Michael
Millan, Rt Hon Bruce


Brown, Robert C. (Newcastle W)
Foster, Derek
Mitchell, Austin (Grimsby)


Brown, Ronald W. (Hackney S)
Fraser, John (Lambeth, Norwood)
Mitchell, R. C. (Soton, Itchen)


Brown, Ron (Edinburgh, Leith)
Garret), W. E. (Wallsend)
Morris, Rt Hon Charles (Openshaw)


Buchan, Norman
Golding, John
Newens, Stanley


Callaghan, Jim (Middleton &amp; P)
Gourlay, Harry
Oakes, Rt Hon Gordon


Campbell-Savours, Dale
Graham, Ted
Orme, Rt Hon Stanley


Canavan, Dennis
Grant, George (Morpeth)
Palmer, Arthur


Carmichael, Neil
Hamilton, James (Bothwell)
Parry, Robert


Carter-Jones, Lewis
Hamilton, W. W. (Central Fife)
Powell, Raymond (Ogmore)


Cocks, Rt Hon Michael (Bristol S)
Hardy, Peter
Prescott, John


Coleman, Donald
Harrison, Rt Hon Walter
Race, Reg


Concannon, Rt Hon J. D.
Haynes, Frank
Radice, Giles


Conlan, Bernard
Hogg, Norman (E Dunbartonshire)
Richardson, Jo


Cook, Robin F.
Holland, Stuart (L'beth, Vauxhall)
Roberts, Albert (Normanton)


Craigen, J. M. (Glasgow, Maryhill)
Home Robertson, John
Roberts, Ernest (Hackney North)


Cryer, Bob
Hooley, Frank
Rooker, J. W.


Cunliffe, Lawrence
Hughes, Robert (Aberdeen North)
Ross, Ernest (Dundee West)


Dalyell, Tam
Hughes, Roy (Newport)
Rowlands, Ted


Davis, Clinton, (Hackney Central)
Jones, Rt Hon Alec(Rhondda)
Sheerman, Barry


Davis, Terry (B'rm'ham, Stechford)
Jones, Dan (Burnley)
Shore, Rt Hon Peter (Step and Pop)


Dean, Joseph (Leeds West)
Lamond, James
Silkin, Rt Hon John (Deptford)


Dempsey, James
Leighton, Ronald
Smith, Rt Hon J. (North Lanarkshire)


Dewar, Donald
Lestor, Miss Joan (Eton &amp; Slough)
Snape, Peter


Dixon, Donald
Lewis, Arthur (Newham North West)
Soley, Clive


Dobson, Frank
Lewis, Ron (Carlisle)
Spearing, Nigel


Dormand, Jack
Litherland, Robert
Spriggs, Leslie


Douglas, Dick
Lofthouse, Geoffrey
Stott, Roger


Dubs, Alfred
Lyon, Alexander (York)
Strang, Gavin







Taylor, Mrs Ann (Bolton West)
White, Frank R. (Bury &amp; Radcliffe)
Young, David (Bolton East)


Thorne, Stan (Preston South)
Wigley, Dafydd



Torney, Tom
Wilson, Gordon (Dundee East)
TELLERS FOR THE NOES


Wainwright, Edwin (Dearne Valley)
Winnick, David
Mr. George Morton and


Weetch, Ken
Woolmer, Kenneth
Mr. James Tinn.


Welsh, Michael
Wright, Sheila

Question accordingly agreed to.


Bill read the Third tune and passed.

EUROPEAN COURT OF JUSTICE

The Attorney-General (Sir Michael Havers): I beg to move,
That this House takes note of Council Documents Nos. R/2075/78 and 4679/79 on reorganisation of the Court of Justice, and considers that any enlargement of the Court should take place only if a genuine need for it is clearly established.
In these two documents the President of the Court of Justice makes proposals for the enlargement and reorganisation of the Court to cope with its increasing work load. Before I outline those proposals, it may be helpful if I give a brief description of the structure and work of the Court as it is at present constituted.
The Court consists of nine judges. Although the treaties impose no nationality requirement, in practice there is one judge from each member State. The nine judges are assisted by four advocates-general, who rank equally with the judges. Again, the treaties impose no nationality requirement, but by a tacit understanding there is one from each of the four large member States—the United Kingdom, France, Germany and Italy.
The functions of the advocates-general are very different from those of the judges. I shall attempt to describe them, because an understanding of their functions is central to the Court's proposals, and we have no equivalent officer in our judicial system.
The duty of the advocate-general is, acting impartially, to make reasoned submissions in open court on cases brought before the Court of Justice to assist the Court in its interpretation and application of Community law. He does this after the parties have completed their written and oral submissions, so that, while he may be influenced by those submissions, it is not possible for the parties to comment on the submissions of the advocate-general. He does not retire with the judges to defend his submissions before them, as the advocate-general does in the French legal system, and the Court is entirely free to accept or reject his conclusions, or to reach the same conclusions by a different line of reasoning. This occurs in a substantial number of cases.
The nature of the cases with which the Court has to deal varies widely. Of first importance are cases brought by the Commission against a member State, or by one member State against another, alleging a failure to fulfil an obligation under the treaties. Conversely, a member State may ask the Court to declare that a regulation, directive or decision of the Council or the Commission is illegal, and individuals and companies have the same right in the case of instruments which are of particular interest to them. These cases are all direct actions, in which the Court determines the dispute finally as between the parties—assuming, of course, that the parties comply with the Court's judgment, which, as we know, is not always the case.
A second category of case—by far the largest—is where the Court is asked by a national court of a member State to rule on the validity or interpretation of a provision of the treaties or of secondary legislation made under them. Cases of this type vary greatly in importance, depending on the principle of Community law that is being interpreted.
Last in order of importance, and well down the list, come disputes between the Communities and their officials and staff. These cases are plainly of importance to those concerned, but to us they are important only because a substantial proportion of the time of those eminent judges is occupied in determining disputes which, for example, in this country, would be heard by an industrial tribunal.
With this rather lengthy introduction—I apologise to the House for it—I can now turn to the two documents that we are considering.

Mr. Tam Dalyell: Some of us who have had experience of the European Assembly were under the impression—it may be a wrong impression—that it was absurd that the European Court of Justice should spend so much time on what we would regard as comparatively trivial disputes which have no business to go to the Court and should be handled by some other authority. Am I wrong about that matter?

The Attorney-General: With respect, the hon. Gentleman, with whom I agree quite often, is absolutely right about this. During the course of my speech I intend


to refer to the need to take away from the Court itself, by putting them down to chambers, or to divisions, or in some other way, matters with which it should not be the duty of the senior judges of the European Court of Justice to deal. I should like to hear the views of the House about it. Looking at the figures over the last year, it is incredible to see how much time is taken in dealing with what we call staff cases.

Mr. Dalyell: T hat is right.

The Attorney-General: I warn the House that the figure that I am about to give must be taken with a pinch of salt, because there was an attempt to group cases, but there were 1,163 staff cases out of a total for the whole of the European Court of 1,322. Such cases in this country would never get to the High Court they would be dealt with by an industrial tribunal. They might get to the employment appeal tribunal on appeal, but there would be only a few of them, and they would be simply on points of law.

Mr. Ivan Lawrence: Will my right hon. and learned Friend tell us a little about these staff cases? What does he mean by a staff case, and how trivial is it?

The Attorney-General: A staff case is any dispute by those employed by the Commission with their employer, the Commission. They all end up, unfortunately, as having to be dealt with not by the European Court sitting in plenary session but by one of the chambers (or divisions of the European Court. As I indicated, we have to take this with a large pinch of salt, because about 600 cases were grouped together, but 1,163 out of 1,322 cases in 1979 were staff cases.
It is ridiculous that highly qualified senior judges, nominated from the member States, should even in chambers or in divisions—whichever phrase one likes to use—have to spend so much time on matters which in this country would get to our High Court only on appeal on a point of law.
The first document, No. R/2075/78, is a memorandum that the President of the Court sent to the President of the Council in July 1978. In it it was proposed

that, to cope with the Court's increasing work load, there should be an immediate increase in the number of judges from 9 to 12, and in the number of advocates-general from four to six. The President also urged that a second legal secretary should be appointed to assist each of the judges and advocates-general, who already had one legal secretary to assist them. In the longer term, the President proposed that from 1984—the date when we might have the three new members of the Community—there should be 17 judges and eight or nine advocates-general. This was justified on the ground that by then Greece, Portugal and Spain would all have acceded to the Communities and that the Court would have assumed additional jurisdictions, such as, for example, the interpretation of the Community patent convention. In passing—I shall give the House greater detail if asked—I think it is not right to expect that that convention will cause a great deal of further work.
These proposals were discussed at a Council of Ministers of Justice in October 1978. The member States were willing to agree to the appointment of a second legal secretary, phased over the following year, but no member State agreed to an increase in the number either of judges or of advocates-general. Instead, the Court was invited to put forward proposals for the amendment of its rules of procedure which would enable more cases to be heard by divisions of the Court—these are called chambers but I think that the translation is not accurate—rather than by the full Court.
The Court's further proposals are contained in the second document, No. 4679/79. Hon. Members will have seen that in this document the Court repeats its previous requests for additional judges and advocates-general and also makes detailed proposals for the amendment of its rules, some of which are concerned with the allocation of a greater number of cases to chambers of the Court, and others of which deal with a number of miscellaneous matters where amendment was desirable. The reason that I do not like the word "chambers" is that in this country to hear something in chambers means hearing it in private. This is an English translation of a French term that would be more accurately described as "divisions" as it is heard in public.
A working party of experts from the member States was set up to examine these proposals and at the same time to examine proposals that this country had put forward to improve certain aspects of the functioning of the Court. That will be found as an annex to the explanatory memorandum to document 4679/79. Between March and June of last year, the expert working party examined the Court's proposals and our own and agreed on suitable amendments to the rules of procedure, which, among other things, would allow a much greater proportion of cases to be heard by a division of the Court.
Under article 188 of the EEC treaty, and parallel provisions of the other two treaties, the Court adopts its own rules of procedure but subject to the prior approval of the Council. The Court was naturally anxious that its amended rules of procedure should be in force by the beginning of the following judicial year—in October of last year.
I took the view that the Select Committee, when it recommended these documents for debate as raising questions of legal and political importance, had in mind the proposals for the enlargement and reorganisation of the Court rather than the amendments to the rules of procedure. I did not feel that the United Kingdom would be justified in withholding its approval of the amendments to the rules and I accordingly agreed to our giving our approval and I so informed the House in a written answer on 26 July. I am glad to have this opportunity of apologising to the House for having agreed to this comparatively minor matter after it had been referred by the Select Committee for debate. I wrote to the Chairman, but the Chairman of the Select Committee was appointed so late that, although I could inform him of what we wished to do, it was not possible to get a final decision in time.

Mr. Dalyell: Although I was a Member of the Scrutiny Committee, I have no right to speak on behalf of my colleagues. However, difficulties tend to arise from time to time. Has the Attorney-General reflected on how these necessarily complicated matters—the Select Committee and the Scurity Committee—should be dealt with?

The Attorney-General: Because there has been a change of Government we have a new Committee, which took an unconscionable time in electing a Chairman. I hope that I have not criticised the Committee too seriously.

Mr. Dalyell: Appointing a Chairman.

The Attorney-General: I am sorry, I meant to say that the Committee took a long time to appoint a Chairman. I wanted to consult the Chairman about that matter and that was done openly and frankly. However, if we had missed the boat in Brussels in June or July it would not have been possible in October to have brought in the new procedure. The new procedure was designed to increase the number of cases heard by the European Court in its divisions.
Since one of the reasons for appointing greater staff was the backlog, and since the appointing of divisions and increasing the work that the divisions can do would have reduced that backlog, I thought it right to do it As far as possible, I consulted the Chairman, but inevitably a delay arose after the change of Administration, between the appointment of the Scrutiny Committee, the Select Committee, and the appointment of the Chairman. There simply was not time to deal with this matter.

Mr. Nigel Spearing: I am also a member of the Scrutiny Committee. Speaking from memory, I think that there was no delay concerning the appointment of the Chairman of that Committee—my hon. Friend the Member for Birmingham, Erdington (Mr. Silverman). Will the Attorney-General refresh our memory and tell us whether there was not an undertaking by the Leader of the House that if a member of the Government concerned gave assent prior to a debate the Government would announce it to the House at the earliest opportunity? Will he confirm that, and will he also confirm that the comment that he has just made is the first announcement to the House? Does he also agree that it was not made at the first opportunity? Has it been done before?

The Attorney-General: I hope that the hon. Gentleman will forgive me if I do not get the facts completely accurate, as I am speaking from memory. It was agreed that if the Government of the day


were unable to have a debate it would be announced to the House at the earliest opportunity. I did that by a written answer on 26 July 1979, which is reported at column 353 of the Official Report. I set out at some length why that had happended and why I felt that I had to take that action. I hope that the hon. Genleman will accept that that was the first opportunity.
I am not criticising the Committee for not appointing its Chairman, but because of the change of Administration there was a delay. I thought that it was a pressing matter. I took the view, I hope rightly, that what the Scrutiny Committee was concerned about was the increase in staff of judges and advocates-general, but that any measure that would increase the speed of turnover of cases without a pound or a Eurodollar more being spent would not be of concern to the Committee if I approved it. That is what happened.

Mr. Douglas Jay: Can the right hon. and learned Gentleman also assure the House that he and, indeed, this Government are not departing from the general undertaking adhered to by all previous Governments since we joined the Community that when the Scrutiny Committee has recommended a particular instrument for debate the Government will not allow a fait accompli to occur in Brussels before that debate?

The Attorney-General: I have no hesitation in reaffirming that undertaking.
In the discussions that I had with the Chairman of the Committee, there simply was not time, as I understand it, to get it done. I took the view—I may be wrong—that the principal matter that was concerning the Scrutiny Committee was the appointment of further judges, as asked for by the Court, and further advocates-general. Unfortunately, in the documents coming from the Court of Justice, the two were indistinguishable. There were the further appointments and also the matters concerning the reorganisation of procedure, which did not involve any expenditure. If I had missed that chance in July—because it had to be decided in Brussels by a certain date—we would have missed a whole year in which I hoped, if we got the measure through, we might reduce the backlog. That is why I did it. On any major issue, I certainly would not

override any recommendation from the Scrutiny Committee.

Mr. Peter Archer: As yet another member of the Scrutiny Committee, I am not implying any criticism of the way that the right hon. and learned Gentleman dealt with the matter, but some of us who are perhaps less assiduous than we should be sometimes miss an occasional written answer. Can he confirm that he drew the attention of the Chairman to the written answer?

The Attorney-General: I cannot say that, but there were a number of telephone calls and a letter to the Chairman of the right hon. and learned Member's Committee in which I explained the urgency. For reasons that he explained, it simply was not possible to get the approval in that limited way in the time available.
I had to take a gamble. I felt that it was a right thing to do. We were not dealing with the principal objections or problems that the Scrutiny Committee saw. The European Court now has three divisions, of three judges out of the nine who are already operating under the new procedure, and I hope that that will reduce the backlog.
If I may return to the proposals for the enlargement of the Court, the Court is not well equipped as a fact-finding body, and that is particularly acutely felt in cases between the Communities and their staff. Discussions have been under way for some time, aimed at setting up a first instance tribunal, from which appeals would lie to the Court only on questions of law. We view that as a very necessary development, but take the view that, unfortunately, it requires a minor amendment to the treaties, with all the delay that that involves.
On other matters, such as appeals from decisions of the Commission in competition cases, the Court has proposed the setting up of a first instance tribunal, but only if the full enlargement that it has requested takes place. That is a development that may be desirable in theory, but, for reasons that I shall explain, it is so unlikely in the foreseeable future that I do not think that I need detain the House further with it.
Returning to the proposals for enlargement, the position at present is somewhat complex. The Court maintains in


full the requests that it has made in the documents before the House today, but asserts that there is a particular need for the creation of one more advocate-general post, which would bring the total to five. The Court asserts that now that it functions for the most part in three chambers it can get through a good deal more work, and could get through more still if it were not that in every case there is a requirement for the reasoned submissions of an advocate-general.
Lack of one additional advocate-general is producing something of a bottleneck, according to the Court. This Government are as anxious as anyone that the Court should continue to function smoothly and expeditiously. On the other hand, we have until now opposed the creation of a new advocate-general post. Let me explain why.
It is not just a question of one more officer of the Court. With his two legal secretaries and three additional supporting staff, one extra advocate-general represents an additional annual salary and wages bill of £200,000. That is not a small sum, but if we were convinced that it was necessary expenditure we would reluctantly agree to it. However, at present we remain unconvinced. Each advocate-general has been given a second legal secretary, and, although he must personally remain responsible for the submission that he makes, the additional assistance should considerably increase the number of cases that he can deal with.
Secondly, if there has been a backlog—and I think we must accept that there has—during the latter half of last year, the unfortunate illness of one of the advocates-general for a greater part of this period must have contributed to it. There is power under the treaties to increase the number of advocates-general, but no power to decrease it, and we believe that a permanent increase is not the way to meet a temporary deficiency.
Thirdly, if it is possible to set up a tribunal for staff cases in the near future, taking them away from the European Court, this will also alleviate the work of the Court.
I shall not assume any dogmatic position. One must approach this situation in a flexible manner, and if the need for an additional advocate-general should be established beyond question we shall give our agreement. In any event, the situa-

tion will need to be reviewed at the beginning of next year, when Greece enters the EEC, and then again two years after that with the accession of Spain and Portugal.
We will, if necessary, agree to one additional advocate-general, but we are by no means persuaded that increases in the complement of the Court are the right approach to the problems of the mounting work load. The difficulties are likely to recur unless the load itself is lightened.

Mr. David Mellor: I am a little confused about two matters relating to work load. The Attorney-General has quoted from figures for the 1979 work load for the Court. Am I right in thinking that, once one subtracts the number of staff cases, there were fewer new cases passed to the Court in 1979, compared with the figures quoted in the document for 1977 and 1978?
Also, I understand that the crucial point governing whether the Court must sit in plenary session is whether it is an institution of the Community or a member Government associated with the action. Can my right hon. Friend give us a breakdown of the number of cases that are not staff, and which must, under the rules, go to the full Court rather than be dealt with in chambers?

The Attorney-General: The rules have been changed, because of my approval last autumn. My hon. Friend is perfectly right. If one deducts the number of staff cases in 1979, the figure was substantially below that for 1978, and about on a par with 1977. In fact, the other highest year was 1973, when again we had a block of staff cases which all went in together.
What is proposed, and is now in effect, as a result of the approval of all the member States last summer, is that the three divisions can sit simultaneously. Inevitably that has increased the turnover as we want.

Mr. Ron Leighton: Am I right in thinking that each of these new creatures will cost us £200,000 and that most of their time will be taken up with pettifoging affairs of staff overtime that would be dealt with by lower tribunals in this country when there are important edicts of which Governments like the French take no notice? What are their holidays? How many hours a week do they work?

The Attorney-General: I am sorry that I cannot give the holidays. I have appeared before the Court. It consists of distinguished and highly qualified judges from the nine member States. There is no doubt that they work extremely hard, as do the four advocates-general, who have a tremendous load. The staff cases, which make up so much of the work, are dealt with in a division or chamber, but that is still an intolerable and impossible load on the Court.
I shall give the House some comparative figures of the amount of work compared with that in our courts. What has to be done is not so much to increase the number of judges or the number of advocates-general. The answer is to be more sensible about the work they do. They should deal with important points of law instead of trivial points of industrial relations or some of the other points referred to them. We are getting quite a long way following the decision that we approved last summer, which means that all three divisions, when sitting, have been able since October to deal with what we could call minor cases though of great importance to the parties. The more important cases, particularly those involving the member States, are reserved for the plenary court and the five-judge divisions.
We are seeking to increase the throughput of the Court so that they are not forced to sit as seven or nine. As a lawyer, I can tell hon. Members that it is ridiculous to have a court of nine or even seven, especially when the court has to give one judgment. The court cannot give seven or nine judgments. It is not like the House of Lords, which can give a three-to-two verdict; it is one judgment. I often wonder, looking at the cases, how one judgment is produced when nine judges are sitting. I consider that five judges are enough in any tribunal.
We will agree, if necessary, to an additional advocate-general, but we are by no means persuaded that it is necessary to increase the number of judges. We have somehow to reduce the load of work of the Court. A further appointment may, in the short term, provide a speedy remedy. In the longer term, there may well be a case for more critical examination of the functions performed by the Court in general and the advocates-general in particular. On the Court's own initiative, an

increase in the number of judges has been avoided, for the present at least, by introducing more flexible arrangements in the creation of divisions of the Court.
Not much can be done without the long drawn out and complex processes of treaty amendment. I have not ruled out, perhaps one day, that a more searching examination should be undertaken, which might find that the task currently undertaken by the advocates-general can be reduced or eliminated altogether. Her Majesty's Government at home are committed to reducing public expenditure wherever possible. It seems unfortunate that the principal reaction to an increase in the work load of the European Court should be a request for further judges and advocates-general.
It may surprise the House to hear that the cost of running the Court is considerable. It is well in excess of half the combined cost of the High Court and the Court of Appeal administering civil justice in England. The number of judges in the High Court and the Court of Appeal, including the President of the Family Division, the Master of the Rolls and the Lord Chief Justice, is 96.

Mr. Leighton: Does the right hon. and learned Gentleman agree that there seems to be even more over manning there than in the British Steel Corporation?

The Attorney-General: I shall not be drawn into that subject, but we have our backlogs too, and the cost of the European Court's nine judges and four advocates-general and their staff is more than half the cost of 96 judges here.

Mr. Archer: In fairness, will the right hon. and learned Gentleman say how much of the cost of the European Court represents the cost of translation, which is a major item in the budget?

The Attorney-General: There are problems about translation. In one case the papers in English going before a French advocate-general totalled 2,000 pages. It appeared that it would take the whole of the translation staff of the Court two years to deal with that one case. Fortunately, someone thought of replacing the French advocate-general with an English advocate-general, and that solved the problem.
Advocates-general and judges are treated equally. Each has two legal secretaries and a back-up staff and it seems that the cost is, by comparison with this country, a very great deal.

Mr. Dalyell: Given that the translators need some legal expertise, since otherwise they will make mistakes between chambers and divisions, how many are legally qualified people who are just very good at translating Danish into Greek, and the rest?

The Attorney-General: May I write to the hon. Gentleman? I have no idea of the answer to that question.

Mr. Lawrence: I hope that my right hon. and learned Friend will not mind my further intervention on the question of cost. The explanatory memorandum says that the Court's proposals do not contain any indication of the increase in staff that would result from an enlargement of the Court or of any costings.
My right hon. and learned Friend has told us how much an extra advocate-general would cost, but he said that the proposals will increase the number of judges from nine to 12 and possibly to 17 by 1984 and will increase the number of advocates-general from four to six to probably eight or nine. What is his estimate of the increased cost of those proposals, including the cost of staff? It sounds as though it may make a significant contribution to the £1,000 million that we are hoping to get back from the EEC.

The Attorney-General: I have made inquiries about that matter, because I thought that someone might question it. One of the freaks of the situation is that there must be an odd number of judges, even though there are unlikely to be 15 or 17 sitting together in a plenary session. When it was intended that Norway should be the tenth member of the Community it was agreed that there should be 11 judges. If we increase the number by one, to 10, we shall have to increase to 11 in order to provide an odd number.
The figures of costs for judges and advocates-general are identical, at about £200,000 each. I suggested to my advisers that an increase to 17 judges—virtually a 100 per cent. increase—and from four to six advocates-general would not mean a doubling of the cost, because

we already have a building for them. I was told that we would have to provide another building, as there is not enough room in the existing building.
If the figure of 17, which I regard as wildly extravagant, were accepted we would just about double our present expenditure, which, at £12½ million, is more than half the cost of the High Court and the Court of Appeal. We may get on the slippery slope of 17 judges, six advocates-general and £25 million a year when I believe that we should increase the Court's efficiency and take away cases on which it should not have to waste its time. That should be our approach.
It seems that the other member States are very much agreed with us on that. I therefore ask the House to say that we should not agree to an enlargement of the Court unless a genuine need has been established for us to accept.

Mr. Douglas Hogg: Will my right hon. and learned Friend clarify one point? It is obviously desirable that the staff cases be withdrawn from the Court. How likely is it that they will be so withdrawn, when can we reasonably hope for them to be withdrawn, and will it be necessary to rewrite the treaty to permit that to happen?

The Attorney-General: That is a matter that I ought to know. I apologise to my hon. Friend. I think that it means amending the treaty. As he will know, that is a slow business. However, I think that we shall have to do it. It seems quite insane that these highly qualified and very expensive gentlemen should have to spend their time on matters that could be handled by the equivalent of an industrial tribunal. We should leave them to deal with the points of law that arise out of those cases, but they should not have to deal with the ordinary day-to-day detail.

Mrs. Gwyneth Dunwoody: We are very grateful to the Attorney-General for his detailed explanation of the way in which the Court works. In a sense he has spelt out a lot of the problems that we in this House have about the Court. It is very different from the institutions that we are used to. It has the right not just to look at legislation


but to tell member States and their legislatures not just that their existing legislation is not acceptable, but that they should change it. The average Briton is not used to that concept.
It is most important that we should be aware of the political implications. When we entered the Community, one of the depressing aspects for many of us was that all of the ramifications of the institutions were not really discussed in adeuate detail by the House of Commons at the time. One of the points that one noticed as a Member of the European Assembly was that the way in which the treaty is drawn means that there are a number of provisions which can be used by the various instiutions gradually to change various important policies, almost by the back door.
For example, article 100 is used by the Commission very frequently to deal with politically sensitive subjects. I am concerned that this particular European Court is growing like Topsy at tremendous speed. The right hon. and learned Gentleman said that it is depressing that these judges should be looking at staff cases. One of the depressing aspects is that some of the staff cases that come before them would be ruled out very early in an industrial tribunal in this country because they would be regarded as vexatious litigation.
It is depressing that there should be this entire panoply of a court with judges sitting and an advocate-general to give a detailed opinion on every one of these cases when, frankly they could be dealt with at great speed, much more efficiently, and in a far better way for the people who suffer from the staff problems. At present any staff case that is referred to the Court is drawn out over a long period, and that simply allows the situation to fester.
From all points of view, the policy that many in the Socialist group in the European Assembly have been pressing for over a number of years is to have a staff tribunal set up as quickly as possible.
I come on to the work of the Court. When, as a Member of the European Assembly, I examined the directives and regulations—particularly the latter, which have the force of law—I was depressed at the numbers of them that were flowing

out of the Commission and the speed with which they were being disseminated. I endeavoured over a considerable period with astonishingly little success to get accurate figures of the numbers of regulations and directives in any one six-months period.
I have tried to ensure that we have from the Commission a plain statement of the timetable. The whole purpose of the European Court of Justice is to decide whether a member State, individual or organisation is contravening the treaties. That can be decided only after a directive is in operation. There is a waiting time to allow the nation States to put their legislation in order. There is another waiting time while the Commission examines the machinery before a matter can be referred to the Court. When an issue reaches the Court, there is a weird situation. A number of matters can be referred to the European Court and, because of the way in which cases are dealt with, evidence can be taken and commented on only in a two-months period, even when the point of law is important.
It is obvious that we must examine the whole machinery of the Court. It is not just a question of having a few more advocates-general and judges to make the work load easier. Why cannot the Commission and the European Court devolve some of their work to the courts and legal systems of the nation States? That is where the arguments belong. Our courts should be capable of dealing with disputes without difficulty. That view is held by many people, but so far we have been unable to persuade the Community.
The Attorney-General should ask a number of detailed questions. We have been given a figure relating to cost. However, when one makes appointments to the Community institutions one does not fill that post alone. The need for translators is doubled and the need for interpreters is increased. Much of the work is in French and there is a considerable need for interpreters and translators.
There is a need for a close look at the Court's habit of not publishing dissenting opinion. As a laywoman, I am depressed that a court of such importance, when handing down a decision, does not publish any dissenting opinion. The judges are required to sign a judgment as being that of the European Court and there


is no opportunity to know what a dissenting judge feels about a decision. Since there is no appeal beyond the European Court, it is important that there should be a clear statement of the reason for reaching a decision.

Mr. Douglas Hogg: I recognise the value of dissenting judgments, but might they not lead to uncertainty in areas of law where it is important to have absolute certainty?

Mrs. Dunwoody: I have no legal training. I have always done my best to stay out of the hands of lawyers. My experience is that any brush with them is tiring, exhausting and extraordinarily expensive. Of course, I defer to the greater knowledge of the law expressed by the hon. Member for Grantham (Mr. Hogg). However, generally, when a court is adjudicating on an issue which is of concern to nine nations, I believe that the judgments must be clearly stated and that any dissenting judgment should be stated in a way which is available to the ordinary folk of the EEC.
Too much of the Court's work is in camera. I recall a marvelous occasion when my energetic and remarkable hon. Friend the Member for West Lothian (Mr. Dalyell) succeeded in getting into the European Court of Justice and hearing a detailed case for some time before anybody realised that he was there. That was very useful, because he was listening to a case of considerable importance to his constituency. There should be more opportunity for people to listen to the Court's proceedings.

Mr. Dalyell: I am sorry to correct my hon. Friend, but it was in fact the European Commission on Human Rights. It is a long saga, with which I shall not bore the House.

Mrs. Dunwoody: I apologise to my hon. Friend. I thought that it was the Court of Justice.
The other point that the right hon. and learned Gentleman did not make was that the buildings in Luxembourg connected with the Court grow apace. Many of the hearings take place in buildings devoted to various related subjects. There is continual expansion. As one drives from Luxembourg airport to the Parliament buildings, it is sad to see continual

changes in the beautiful woods, where new buildings are constantly being put up. Many of them are connected with the Court. I hope that the right hon. and learned Gentleman will bear that in mind when he talks to the Community about the cost. It is a question not merely of people but of accommodation.
I am very grateful to the right hon. and learned Gentleman for saying that he wants us to take note of the document but not to agree to the increase unless there is a "genuine need". I have one or two reservations about "genuine need". The right hon. and learned Gentleman's definition might not be the Opposition's. However, it seems clear that he does not intend to allow any more empire building without looking at it extremely closely.
If we consider changing the composition of the Court, I believe that in the final analysis we shall have to consider not only the procedures but the Court's overall effect on the people of this country. We should look not merely at how much it costs but at how effective it is. To create bad laws which cannot be administered brings the law into bad repute. There are one or two classic examples that seem to indicate that the Court is not capable of persuading people to observe its judgments.

Mr. Haugh Dykes: The hon. Lady has delivered her usual chauvinistic attack on the Community, this time on the Court of Justice, but is she not being a little unfair? Of all the Court's major pronouncements, at least in recent years, I believe that the number helping this country have very much exceeded any criticisms. Certainly the Court has made a number of important judgments against the other member States to the assistance of this country. I cite, for example, its decision on lamb entering France—we shall see what happens about that—the public supply contracts decision, and so on. Those are examples of the Court's helping this country.

Mrs. Dunwoody: With great respect to the hon. Gentleman, with whom I have been fighting for a number of years on precisely these grounds, he knows that the decision on lamb has not been carried out. He also knows that the decision on public contracts has cost the British Government and this country a fortune,


while there are good grounds for believing that very few other members States are complying.

Mr. Dykes: In that case, if the hon. Lady would like to see the Court's judgments enforced, that means strengthening the Court, not weakening it.

Mrs. Dunwoody: As I have explained, I believe that we have a reasonably efficient legal system in this country, which has grown up over many hundreds of years, and it could take a great deal of the work off the back of the European Court and save the taxpayer a certain amount of money. I should have thought that the hon. Gentleman would agree.

Mr. Spearing: The Court's judgment relating to health regulations on milk imports could in the end destroy doorstep delivery in this country. Does not my hon. Friend think that that is an extra power, which it has by law, that we must consider very carefully?

Mrs. Dunwoody: I am grateful to my hon. Friend for reminding me of that. The Miniser of Agriculture, Fisheries and Food has said more than once at the Dispatch Box that the advocate-general found for the British. In fact, that is not the case. There is real doubt in this instance, because if our health regulations are to be overridden on the ground that they discriminate on a European basis that will not be in the interests of the British consumer, of children or of those who believe firmly that we must maintain a high standard of health care.

Mr. Dykes: rose—

Mrs. Dunwoody: If the hon. Gentleman will forgive me, I shall not give way. We can continue our perpetual argument outside the Chamber. There are other hon. Members who wish to participate in the debate.
We have considerable reservations about the work of the European Court. We believe that it must be examined closely. The enlargement and the changes in procedure offer a good reason for examining closely what is happening. If Her Majesty's Government are prepared to say clearly that it is their intention to use the changes, which I believe must be supported by changes in the treaty, to propose radical changes in the way in

which the Court works, they will have the support of the Opposition. If they do not, I foresee a rising tide of criticism of many of the long-drawn-out bureaucratic procedures. We shall want to discuss them again before we agree to any enlargement.

Mr. David Mellor: I welcome the way in which my hon. and learned Friend the Attorney-General has dealt with the two Community documents. The documents advance two distinct lines of argument. The first document concerns the essential reforming of the procedures of the Court. The second concerns an application to increase the number of judges and advocates-general. The sad feature of the documents is that they do not recognise that the two factors do not go hand in hand. The enlargement of the Court and the number of advocates-general may be premature if the reforms of the way in which the Court conducts itself are carried through.
I suspect that the way in which the Court has sat has been based not on juridical considerations but on the prestige of the countries concerned. There can be no sound judicial reason why the Court should sit with a minimum of seven judges and a maximum of nine. Plainly the reason owes much more to the distrust by some member States of other member States' judges. I suspect that that is why the Court has persisted in sitting en bloc for so long.
The effect of the changes to which my right hon. and learned Friend gave sanction some months ago is to enable an increased number of cases to be dealt with in a much more logical and sensible way, with teams of three judges sitting together in such a way that three parallel cases may be heard at the same time. As I understand it, article 165 is so entrenched in Community law that it is not possible to alter the sitting of the full Court when a Community institution or member State is a party. Therefore, we shall not see the end of the Court sitting en bloc.
I do not have figures to hand of the number of cases that come before the Court that have a Community institution or a member State as a party, but the effect of the Court in sitting with three judges would be to increase the speed with which it dispatches its business. That


must mean that the backlog that has accumulated would be eroded, unless there is compelling evidence that the volume of work passing through the Court will increase. It is clear from the answer that my right hon. and learned Friend gave to my intervention that there is no such evidence.
In the first appendix to document R/2075/78 we have the number of new cases introduced in 1977 and 1978, excluding staff cases. There were 164 in 1977 and 268 in 1978. The latter figure was inflated by 68—namely, the number of cases that were linked, that were on the same point and that could more properly be considered as one matter. The figures for 1979 appear to show that the number of new cases introduced into the Court in that year has reverted to the level of 1977.
If my right hon. and learned Friend is right that the effect of the new European convention will not add materially to the work load of the Court, we do not have a position in which the work load of the Court is growing. If I am right in thinking that only a small proportion of those new cases, pursuant to article 165, involve the necessity for the Court to sit en bloc, the effect of its sitting in groups of three will be radically to reduce the work load. That explodes the whole basis of the second line of argument advanced in the document that there is a real need for the Court to be increased in size.
Whether we are pro-European or anti-European, it is not one of the more endearing features of the Community that it creates so many extremely well-paid jobs. Whatever our ideological point of view, we are right to consider with scepticism proposals that will involve a tremendous increase in Community expenditure. The right approach for the House to adopt is the one that my right hon. and learned Friend has advanced—that the proposals for the changes in the manner that the Court conducts itself are plainly sensible and we give them a wholehearted welcome. Because they are so sensible, and because the manner in which the Court previously conducted itself was conducive to building up the pressure of work and not conducive to the speedy disposal of business, we must see how the new procedure is working before we contemplate any extension of

the number of judges and advocates-general.
The second part of the document, the application for increase, is plainly premature. We are right to regard it with scepticism, and I hope that that will be the tenor of the debate.

Mr. J. Enoch Powell: The House plainly has been relieved to learn that the Government do not intend to consent to the proposal for enlargement of the Court that is the major subject of the documents before the House. I assume that we may take it from that statement that, if in their view at some time circumstances change and they propose to give consent, the matter would, in some form, be brought back to the House, so that the case could be made just as the case has been made this evening in the contrary sense, I think to the satisfaction of the House.
It is pertinent, when the Community comes before us with a proposal to expand and increase the capacity of the Court, that we direct some attention to its functioning; and if the consideration of these documents has done nothing else it has produced the report of a Select Committee of another place which reviews the position of the European Court in the constitution of the EEC as a whole.
That report is salutary reading for anyone who is unaware that to adopt a written constitution—that is what the Treaty of Rome is—which will be applied and interpreted by a supreme court is destructive of and incompatible with parliamentary democracy, or even with the rule of law as we have hitherto understood it in this country. A few quotations from that authoritative report of another place bear that out. Some might have seemed startling if they had been published and available at earlier times when more profound decisions were being taken by the House.
Everyone accepts that it must be the function of the Court to adjudicate upon the application and interpretation of the treaty. That automatically brings with it—and here I quote—
review legislation enacted by Member States, including Acts of the United Kingdom Parliament".
Therefore, it is within the power of the Court, and necessarily so, to strike down


an Act passed by this House, whether before or after our entry into the Community.
The matter by no means stops there. It is the development of the functions of the Court which is of particular importance and interest; for apart from the treaty itself
there are further sources of Community law. The Court has deduced from the provisions of the Treaties certain general principles of law which it regards as underlying those provisions".
So, the Court, in the style of all supreme courts—this is in the nature of the animal—proposes to make law—to philosophise and then to apply the consequences of its philosophy.
For instance,
the report continues,
it"—
that is, the Court—
has deduced 'the general principle of equality' from the prohibition in the EEC Treaty on discrimination…Other principles are derived from national legal systems, such as the principles of 'proportionality' and the protection of 'legitimate expectations' which are derived from German law".
I commend to the study of hon. Members appendix 2, in which illustrations of the application of principles of German law by the Community's Court are set out. I shall quote only one case, in which the Court held that
failure to observe a general principle derived from national sources…would itself be treated as an infringement of the Treaty since the principle formed part of the Community legal order".
In the view of our Supreme Court, therefore, it is within the competence of that Court to decide what is the nature of "the Community legal order" and to discover components of that legal order in the law of the various States.
There is yet another role, namely
the development of the power of the Court to award damages for harm caused by legislative Acts which it is empowered to annul".
That again is a power which the Court is in the course of evolving. I give one further example. It considers
that the Community could be liable for legislative action if a 'sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred' ".
Thus the Community's Court is setting itself up to define a
superior rule of law

and then to apply it not only to the lawmaking institution of the Community—the Council—but to the subordinate legislatures of the component States.
In the light of those evidences of the proceedings of the Court, it can hardly be thought that the report of another place exaggerated when it described the Court not only as having
developed a distinctive role in the processes of Community law
but as
arguably making law as well".
The principal point I want to make is that this is not accidental. It is not a special exorbitance on the part of this European Court which could be checked, and which arguably ought to be checked. It is in the very nature of the institution in which this country has temporarily involved itself that, where there is a written constitution, the interpretation of that constitution will lie with a court and not with any legislative or representative body. That court, in interpreting the treaty, like the Supreme Court of the United States in interpreting the constitution of the United States, will evolve its own principles of law, which will not be subject to any control or correction by the legislative bodies either of the Community or, still less, of this country.
It would be difficult to imagine any more drastic conflict with the rule of law as we know it in this country, where the representatives of the people, in Parliament assembled, have the power not merely to make the law and to unmake the law but to correct whatever they regard as wrong interpretations placed upon the existing law by the courts—where, in short, the representatives of the people in Parliament assembled are supreme.
That cannot be so in the Community; and I suppose there could be no more dramatic illustration or proof of the fundamental surrender—although one capable of being recalled—which this House has made by becoming part of the European Community. It was useful that we should be reminded of it, even though the nature of the proposition before us was of a more subordinate character.

Mr. Douglas Hogg: I rise only to make three points. I begin by


expressing my support for two of the points put forward by the right hon. Member for Down, South (Mr. Powell). I entirely agree with him that if the time comes when it is desirable to increase the number of judges the matter should be brought back to the House. That was a valuable suggestion and I hope that my right hon. and learned Friend, who has charge of these matters, will bear it in mind.
The second area in which I support the right hon. Gentleman is this. The right hon. Gentleman criticised the Court because it makes law. He is right: it does make law. That is the essential characteristic of all courts whose principal duty is to interpret either treaty or statute. I do not find that offensive, but I am glad that the right hon. Gentleman made the point. It is essential that the House should beat in mind that the Court has a legislative role.
The only other point I should like to make is short. I congratulate my right hon. and learned Friend on his approach to this matter. I am sure that he is right when he says that these proposals should be treated with great scepticism. I entirely support what I think is the main thrust of his argument, that we should concentrate on reducing the work load of the Court and upon improving efficiency rather than on increasing the number of judges or personnel. That seems to me to be a wholly sensible approach, and I commend it to the House.

Mr. Peter Archer: I sought to catch your eye, Mr. Deputy Speaker, because I think that I share with the Attorney-General the privilege of being among the few Members of the House who have appeared before the European Court. I begin by echoing the right hon. and learned Gentleman's tribute to the care which that Court addresses to the arguments presented to it and the unfailing courtesy which it always offers to advocates.
I should differ from the right hon. Member for Down, South (Mr. Powell). One may agree or disagree with any or all of the provisions of the Treaty of Rome, but I see nothing surprising or shocking in the concept of an international tribunal which has power to tell the almighty nation State when it is

infringing its international obligations. That will be more and more a factor of international life in the coming years.

Mr. Spearing: My right hon. and learned Friend is perfectly correct with regard to a treaty or an adjudication on truly international matters, but does he not agree that what he has just called international obligations are, in many EEC respects, matters of a close, domestic nature which hitherto would not have been given the appellation "international"?

Mr. Archer: It is true, as my hon. Friend the Member for Newham, South (Mr. Spearing) has said, that in many respects these days what happens in one country may have a profound effect on the daily lives of people elsewhere. That is why we have international instruments for the protection of human rights, about which he cares deeply. My hon. Friend and I may disagree about a particular provision of the Treaty of Rome, but there does not appear to be anything shocking in having international obligations about what goes on in ordinary domestic life within a nation State.
The European Court of Justice is facing a problem which many other courts have faced from time to time: how to cope with present or potential arrears of work. If a court is unable to cope with that problem, it risks the general loss of confidence of those who litigate there and with it the loss of confidence of the public in the whole legal order. Justice delayed is frequently justice denied, and justice denied, either domestically or internationally, is an invitation to redress people's grievances outside the legal order. Therefore, the matters raised by the Court were proper to be raised.
There are four ways in which we might attempt to deal with that kind of problem. First, we may increase the capacity of the Court by providing that it may meet in two or more chambers or divisions, which may or may not entail an increase in the number of judges.
Secondly, we may seek to limit the jurisdiction of the Court—for example, by providing that other tribunals shall deal with some of what has hitherto been its work.
Thirdly, we may speed up the manner in which cases are dealt with. Of course,


procedural innovations in this instance will help only if they reduce the amount of judge time that is spent on a case, because that is the limiting factor.
Fourthly, we may combine the second and third methods and have a kind of screening procedure to ensure that matters which are outside the jurisdiction of the Court or which are obviously nonstarters do not occupy a great deal of time.
We have to adopt at least one of those four suggestions. Of course, we do not necessarily have to adopt all four. However, I do not know of any method that does not fall within one or other of those categories.
The Court has made a number of suggestions in all those categories. First, it has proposed an amendment to article 9 of the rules of procedure so as to permit it to meet in what the Attorney-General has rightly termed divisions rather than chambers. That is already functioning. I hope that we shall welcome that suggestion. It is an innovation for the European Court of Justice; it is not an innovation for many other courts. The Court of Appeal does it regularly. The other place has two appellate committees. The French cour de cassationdoes it as a matter of course. The United States Supreme Court has rejected it as a solution because of the problem of unanimity. But perhaps unanimity can be bought at too high a price.
It does not shock me. I should not be shocked if the Court suggested an amendment to article 165 of the Treaty so that it would not be necessary for the full Court to hear even matter initiated by nation States or by Community institutions. It is not the only amendment to the Treaty that I would welcome, but there are problems about that and perhaps we shall not see it in the immediate future.
As for the second way of dealing with the problem, the Court suggested limiting its jurisdiction by providing that cases involving the hearing of evidence and the deciding of questions of fact should be dealt with by tribunals directed to a particular part of its work—specifically staff cases and, when the patents convention is implemented, patent cases. That seems the most sensible of all these suggestions.
I understand that there was a slight division of opinion in the Select Committee in another place, because there were those who said "Before we have new tribunals, why not try to change the Court's procedures so that, for example, it pays more attention to oral evidence?" I am not so sure that these are alternatives. There is no reason why, when the Court has to decide a question of fact, it should not give more priority to oral evidence. But that will not solve the problem of its work load. For that reason, I hope that we shall see some of these tribunals of first instance coming into existence.
Thirdly, the Court suggested some amendments to its procedure. One amendment that would save judicial time is by ensuring that pleadings should be complete with annexes as soon as they arrive, and that there should be sufficient copies of them to distribute within the Court. That is a very simple suggestion, and it would help very substantially.
There are one or two other procedural suggestions, where I am not sure that they would meet the problem. It does not seem to me to meet the problem of judicial man-hours to ensure that the file is completed at an early stage, and that there are only two months, for example, in which to file observations. We all know that a Government are a fairly unwieldy kind of body. The member State has to learn that the issue exists. It is to obtain the documents or copy documents that the Court will not release. It has to consult the various Departments concerned. It has to consider the observations of those Departments. Possibly it has to have a consultation with the Law Officers and to draft its observations. That one does not appeal to me, particularly as I do not feel that it deals with the problem in any way.
Obviously, it is better for everyone if the precise question is formulated as clearly as possible at an early stage, and for that reason I originally had some sympathy with the suggestion of the Court that not all the domestic courts of the national States should be empowered to submit questions to the Court. I think on reflection that I have altered my mind on that. It seems to me that it would be a great pity if there were two types of domestic law, that


relating to the Community and another type, with one type being a matter which can be dealt with only by the superior courts. For that reason, I share the views of the Select Committee.
Finally, the Court proposed a screening process. There is always a danger with a screening process that the litigant feels that he has been turned away from the judgment seat without a full hearing. But it is done in many other courts. The Court of Appeal in this country, in relation to criminal appeals against sentence, does it as a matter of course. When this country accepted article 25 of the European Convention on Human Rights, it was said that the whole work of the Commission would break down beneath the weight of the chips on the shoulder of every screwball in creation. That that did not happen is due partly to the fact that it adopted a screening procedure. I hope that the Attorney-General will recommend that that should be done here.
We live in a world where increasingly activities in one country impinge upon others. Inevitably, that gives rise to disputes. Unless the world is prepared to accept a form of arbitration for its disputes, it will be condemned to a succession of cod wars, trade wars, and probably hotter wars. When international arbitration is ignored or where it is treated with contempt, as it was recently by France in the context that we all know, it does a grave disservice to the whole process of living together. The European Court of Justice is building up an important body of jurisprudence that will help us in that process. Anything that will assist it is to be welcomed.

Mr. Tam Dalyell: I am a non-lawyer, but I have strong feelings on the issue of staff negotiations, because for four years, for my sins, I was a member of the budget committee and vice-chairman of the budget sub-committee of the European Assembly. The number of staff cases churned up in that organisation is, quite frankly, ludicrous. Many people in Luxembourg, in Brussels and in Strasbourg really love the idea of going to court and all the excitement of it. They absolutely wallow in it. It is a great pastime, and no wonder there were 1,163 cases, because they have given a great deal of pleasure to a great many people.

I am not being unduly sarcastic about it, because this is a fact of life.
In these circumstances, what concrete proposals will the Government produce for some kind of tribunal, as has been suggested? It is absurd that many of these cases, which should go near an appeal court only on a point of law and for no other reason, should be dealt with by Lord Mackenzie Stuart and his colleagues. What, therefore, is to be done about it in the form of alternative proposals? I suspect that some of our partners in the Community would be just too thankful if this absurd position were to be changed.
Secondly, reference has been made to a case in which I was involved with the European Commission on Human Rights. I shall not go into the details of that case, although it applies equally to the European Court. There are a number of organisations in this country and abroad that think, possibly rightly, that they can get a great deal of publicity at home by taking something to the European Court.
In the case in which I was involved, a tremendous attack was made in the Court on Scottish teachers concerning the use of the belt. Great analogies were drawn about the Vietnam war, Nazi Germany and so on by an Irish lawyer. However, certain groups in Scotland concerned with civil liberties got the idea that they could make a heck of a lot of running in the press if they went to the European Commission on Human Rights and if they threatened to go to the European Court. There would be headlines everywhere. We must be careful not to allow the Court to be set up as a place where one goes to get publicity and further a cause that is national and not European.
I can give an example of a reduction to the absurd that involves no exaggeration. At that time I was asked several times to take housing matters concerning my local authority to the Court. A petition was made because the drains in Whit burn were unsatisfactory, and it was suggested that that matter should be raised at the European Court. How absurd can one get? That is a laughable instance, but courts can be abused. That is another reason for proceeding very carefully tonight.

Mr. Leighton: I think that the House will agree with the tenor of the Attorney-General's remarks. He seems to find the whole thing unpalatable, particularly the exorbitant cost involved. Will he give us an assurance that he, together with the Government, will not agree to an increase in the number of advocates-general before getting the agreement of the House?

The Attorney-General: I shall deal first with the points made by the hon. Member for Crewe (Mrs. Dunwoody). I am grateful to the House for the support given to the views that I have expressed. I wish to make clear what I have already said about the European Court. I support the speech of the right hon. and learned Member for Warley, West (Mr. Archer), who was Solicitor-General under the previous Labour Government.
We should not treat this as an attack on members of the Court. In many ways they have done a fine job under great pressure. The problems that they face are not of their own making, but they arise because of the treaties. I think we all agree that we should reduce the work load that they face. There are various ways of doing that. The hon. Member for West Lothian (Mr. Dalyell) is absolutely right. We must somehow get rid of staff cases. I think that that could be done by a minor amendment to the treaty. However, I warn him that that still involves an amendment to the treaty which naturally involves the agreement of the other member States. I hope that we shall get that agreement, although I do not know what the indications are. It involves such clear common sense that I hope that they will all agree to the amendment. One must reserve to that Court serious points of law for it to decide, as we have done for industrial tribunals within our jurisdiction.
We must also remember that under article 177 of the treaty our court, if it is the ultimate court from which there is no further appeal—such as the House of Lords—and it is a point on interpretation of European law, is bound to refer it to the European Court. Lower courts may do so.
I take the view that it would be much better if matters were referred only by senior courts. It needs a wise decision about whether a matter should be sent

to the European Court. I believe that there are occasions when magistrates courts are almost stampeded into doing so.
Secondly, the form of the question that is put to the European Court for its decision requires very careful drafting. Last year we had the first reference from the House of Lords to the European Court, and I am happy to tell the House that the European Court acceded to the argument that I put on behalf of Her Majesty's Government.
It is important that we should persuade, as far as possible, other courts to try to let matters be referred by an appeal court, and then that court can decide whether the matter needs referring. Otherwise, as has been said by a number of hon. Members, unnecessary, trivial cases will be referred.
The form of the question is most important. It should be one that provides for an accurate answer and accurate advice from the European Court.

Mr. Nicholas Baker: I should like to say how much I support my right hon. and learned Friend. I have one query on the document produced by the European Court. Quite apart from the proposal already made with regard to setting up an administrative tribunal for staff actions, which we have been discussing exhaustively this evening, the second paragraph on page 3 says that
in the Court's opinion it will in the long term be advisable to create a Community Court of First Instance, for certain categories of actions brought by private persons.
It does not say what kind of actions it is referring to. I do not know whether my right hon. and learned Friend can clarify that point. I would certainly be concerned at massive extension of the work of the Court of Justice.

The Attorney-General: The Lord Chancellor and I welcome every assistance that is offered on how we can reduce the work load of the Court. One of the things that we have to do is increase its fact-finding capabilities, which is one of the great difficulties of a court of that sort. The Court should be dealing with points of law upon facts that have been found or agreed by another tribunal.
The right hon. Member for Down, South (Mr. Powell) and other hon. Members asked for an undertaking that I


should bring back to this House any future proposals. As before, it may be that we are faced with an alternative or a number of alternatives on which we have to move quickly. Without giving any such undertaking, I believe that it is necessary, as far as is possible within the time scale, that the House should be consulted and given an opportunity to express its views.

Mrs. Dunwoody: With the greatest respect to the right hon. and learned Gentleman, we should like a rather firmer commitment than that. He chose previously to inform the House by way of a written answer, and he has explained why he did that. Frankly, however, that is not good enough in a matter of such magnitude. We would like a firmer commitment that such matters will be brought back to the Floor of the House.

The Attorney-General: I should like to give a firm commitment, but it is quite impossible always to do that, when we may almost be doing some horse dealing about what goes on. [HON. MEMBERS: "Come on".] In those circumstances, it would be necessary for me to reserve the position, although I should like very much to be able to bring such matters back to the House.

Mr. Leighton: Are we to understand that the law of the United Kingdom is now dealt with by horse dealing? Is that the way in which we are to be governed in future?

The Attorney-General: I have nothing further to add. I welcome the support that the House has given me tonight.

Mr. Dalyell: Before the Attorney-General sits down—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Member for West Lothian (Mr. Dalyell) has already addressed the House once.

Question put and agreed to.

Resolved,
That this House takes note of Council Documents Nos. R/2075/78 and 4679/79 on reorganisation of the Court of Justice, and considers that any enlargement of the Court should take place only if a genuine need for it is clearly established.

Mr. W. A. DENBY

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]

Mr. Peter Hordern: I wish to raise the case of my constituent, Mr. W. A. Denby. Mr. Denby married in July 1954, but unhappily his marriage did not last long and his wife left him in December 1955. At that time, and until he retired, Mr. Denby was the caretaker at the Warn-ham Court school in my constituency. The school was run by the Greater London Council. Mr. Denby did not want a divorce or a judicial separation; he simply wanted his wife back. But after many years he had to accept reality and he got a divorce. The decree became absolute in December 1976.
Mr. Denby retired on grounds of ill health on 20 March 1976, when he was 61. His service to that date was added to by the period—the three years and 251 days—up to his sixty-fifth birthday to give him a total reckonable service of 25 years and 288 days. This formed the basis for his pension and lump sum payable under the Local Government Superannuation Regulations of 1974. But when, in 1977, Mr. Denby got his lump sum benefit, he found that it had been reduced by £1,446·26, leaving him only £1,819·44. This deduction came as a severe shock to him.
The GLC explained to him that it was bound by the local government regulations of 1974, which provided that in the case of a married man there should be a reduction of two-eightieths of pension able remuneration for each year of service. This would apply unless Mr. Denby had got a judicial separation in circumstances in which the court did not make an order for him to contribute to support his wife, and the deduction would be made up to the date of the separation. But, of course, Mr. Denby did not want a separation. He wanted his wife to return to him.
When Mr. Denby eventually got his divorce there was no order for maintenance for his wife, but by that time it was too late. Even though Mr. Denby had lived with his wife for only just over a year, in the eyes of the GLC he had been married for 22 years. The council's argument was that if Mr. Denby had died the


GLC would have had to pay a pension to his widow. This pension would have been met by a two-thirds deduction from his lump sum entitlement before 1972, although since then there would have been no such deduction.
I do not quarrel with the fact that the GLC had a potential liability and that it was up to it to meet it by some means. I think that the method of meeting the liability was wrong and that there should have been a different pension contribution for a married man compared with a single person. I do not think that it should have been met by a post-retirement deduction from the lump sum entitlement. Indeed, this has since been accepted.
However, in the eyes of the GLC and the Department of the Environment, Mr. Denby was a married man, but not, I fear, in the eyes of the Inland Revenue. That is why I have directed this debate to the Treasury and why I am so glad to see my hon. and learned Friend the Minister of State here tonight. The Revenue had not accepted that Mr. Denby was married, even though the Department of the Environment had. It said that Mr. Denby was, in fact, separated from his wife, even though he did not get a judicial separation. That being so, Mr. Denby was eligible not for the married person's allowance but only for the single person's allowance. This was applied from 1957–58 to the present day. Mr. Denby has been deprived of his proper allowance for more than 20 years because he did not get a judicial separation. Even under the Revenue's own rules he was, I think, entitled to something.
I wish to quote from a letter I received from the Minister of State in another place dated 19 September in which Lord Cockfield said:
A married man is responsible under the common law for maintaining his wife until they are legally separated. Thus, in the interim period between permanent separation and divorce the tax system recognises this fact by continuing to give the married man's allowance in circumstances where the husband can show that, despite their physical separation, he continues to fully maintain his wife by voluntary contributions.
Mr. Denby made a voluntary contribution. It would have been open to him at any time to have obtained a judicial separation. If he had done so, his lump

sum entitlement from the GLC would have been larger by more than £1,400. This seems to me to follow the criteria laid down by the Revenue itself. Lord Cockfield said in his letter:
Payments made under a court order or similar binding agreement for the maintenance of the wife are deductible on a husband's total income for tax purposes and are therefore not taken into account in these circumstances.
The pension arrangement that my constituent, Mr. Denby, had entered into was certainly a binding agreement and therefore, at the very least, the contributions that he made ought to have been deducted from his income before tax. It is true that the Revenue rules say that to qualify for the married allowance a man should fully maintain his wife by voluntary contributions. Mr. Denby did not do that. Even so, there is apparently no statutory definition of what is meant by "wholly maintained"—the term used in the Taxes Acts—but the Revenue takes the view that if a wife is entirely without resources a fairly modest allowance may satisfy the test.
Even by the Revenue's own rules, Mr. Denby should have had the £1,400 deduction allowed lot tax purposes, if not the full married person's allowance. I do not know how my hon. and learned Friend intends to reply to the debate. As the House knows, he has a broad and genuine sympathy with all matters affecting taxpayers. I dare say that he will defend the Revenue rules. All I say is that if a man has a large sum of money removed from him by one Department because it says he is married but he is not allowed to claim a married allowance because the Revenue says he is single, there must be something wrong with the rules or with the Local Government Superannuation Act, and possibly with both.
The fault, of course, lies with the legislation. Two important Departments have a different definition of what constitutes separation. I do not see why Mr. Denby should suffer from this difference. He has suffered a plain injustice that ought to be put right.
It can be argued that if he had ordered his affairs differently, he would not have suffered this treatment. Not everybody is fully conversant, as my hon. and learned Friend is, with every aspect of the Local Government Superannuation Act or even with the Revenue


rules. They should at least be consistent.
That is one of the difficulties inherent in our legislation. Too many Bills are drafted to reflect the views of one particular Department without recognising that they might run contrary to the legislation of another Department. That is our fault and nobody else's. It is certainly not my constituent's fault. We should remember that laws are made for the convenience of men and not the other way round. I hope, therefore, that my hon. and learned Friend will be able to suggest some redress for my constituent. He must see to it that this does not happen again.

The Minister of State, Treasury (Mr. Peter Rees): I am sure that the case of Mr. Denby will command the sympathy of the whole House, not least because it has been put so attractively and persuasively by my hon. Friend the Member for Horsham and Crawley (Mr. Hordern). However, I am not entirely certain whether I can accept my hon. Friend's analysis of the situation or that the fault, if fault there be, should be laid at the door of the Department that I am privileged to represent.
Perhaps I should start with an analysis of the income tax position. To do that one must look at section 8 of the Income and Corporation Taxes Act 1970, which accords a special allowance to married men. It is a provision of considerable antiquity, going back at least to 1918. I shall later cite the rationale put by Mr. Austen Chamberlain, the then Chancellor of the Exchequer, when moving the provision.
A married man's allowance is given to a man if he can demonstrate that he has a wife living with him or has a wife wholly maintained by him and he is not entitled to a deduction for any sums paid as maintenance to her. I submit that, even on my hon. Friend's attractive formulation, Mr. Denby did not satisfy either test. He clearly did not have Mrs. Denby living with him from about 1955 or 1956. Nor—and perhaps this is the point at which I part from my hon. Friend's analysis—was he wholly maintaining Mrs. Denby. He certainly did not claim to have any deduction for any sums paid as maintenance.
I must pause on the question whether Mr. Denby was wholly maintaining his wife. I shall come to the pension provisions. He had a deduction made from the lump sum paid to him on retirement, but he could not be said to be maintaining Mrs. Denby year by year. I am not privileged to know how Mrs. Denby maintained herself and perhaps my hon. Friend does not know either. He has certainly not told the House.
All that we can agree on is that when Mr. Denby retired from his post as a caretaker with the GLC in March 1977 the lump sum to which he was entitled was reduced by the considerable figure of £1,446·26, but that does not constitute maintenance by Mr. Denby of Mrs. Denby. I can understand the circumstances in which Mr. Denby was compelled to submit to that deduction, but it was not under the income tax legislation.
My hon. Friend contained his argument tautly and succinctly and did not enlarge the debate. We could discuss the rationale underlying the provision, which is to recognise that the strain on income is greater in the case of a married man than in the case of a single person. The married man has to maintain two people—himself and his wife. That is an intelligible rationale and has not been challenged.
I cannot pretend to have read the reports of every Finance Bill debate since 1918, but the position has generally been understood and fairly simply applied. There is no great wealth of decided cases on fine points as to what constitutes maintenance. Certainly, I could discover no case that suggests that Mr. Denby's case falls within that provision.
Seeking to do the best that I could for my hon. Friend's constituent, I turned to the superannuation position. I am in some difficulty, because this is not a matter for the Treasury. My hon. Friend has chosen to aim the debate at the Treasury or the Inland Revenue.
The position on superannuation is a matter for the Department of the Environment, which oversees the rules of the superannuation funds. The rules are on the whole agreed between local government employees and the staff associations. I understand that, under the rules which govern this fund, when a married man retires his lump sum retirement allowance is reduced for the period before


1972 when he was married, or, if at the point of retirement he was a widower, divorced or judicially separated, it is reduced for such part of the period before 1972 when he was a married man. The magic of 1972 is that apparently thereafter GLC employees were not compelled to contribute to any pension for their wives or widows.
The rationale for the first reduction in the case of a married man upon retirement is that should he have a widow surviving him on his death there would be a pension for her. I concede that that did not cover Mr. Denby's case because, regrettably, by the time he came to retire he had—in December 1976—become divorced. He did not retire until March 1977.
Under the second leg, however, there was a case for reduction in his lump sum because at any rate up to the point when he was divorced there was a contingent liability on the Inner London Education Authority to pay Mrs. Denby a pension. The GLC was indifferent to the fact that Mr. and Mrs. Denby were separated. So far as the council was concerned, no divorce had taken place and so there was a contingent liability. It was on that basis that a deduction was made when Mr. Denby retired in March 1977.
Mr. Denby may claim that this was a harsh, disadvantageous provision and that the deduction was too big for the contingent liability which in Mr. Denby's case never matured. I do not think that it is proper for me to debate the merits or demerits of that proposition. I am not charged with any particular responsibilities. I am here, to put it crudely, to defend the position of the Inland Revenue. That charge could more properly be put to the Department of the Environment. I can only tell my hon. Friend that this is a point in the rules that has never yet been raised by the staff associations. I am not necessarily encouraging them to do so. It does not seem to be a matter of general concern for those who, like Mr. Denby, are subject to these rules.
In drawing the threads together, the first question I ask is: should the pension regulations for GLC employees follow the tax code? Should there be a precise correlation between the rules of the pension fund and the conditions set out in section 8 of the Act? That is a matter

for the Department of the Environment and for the employers and employees. It is not necessarily a matter on which I should care to express an opinion, although I do not see any particular reason why there should be. These matters can be adjusted by negotiation, and Mr. Denby can perhaps argue that he has not been well treated.
Let us turn the proposition round another way. Should the tax code follow the pension regulations? I am sure that my hon. Friend would hardly argue that the tax code, which is designed for the generality of taxpayers, not just for GLC employees, should be made to fit the circumstances of the pension regulations.
I say, not with smugness, because I understand the feeling of deprivation, that this matter cannot be laid at the Inland Revenue's door. The Revenue is operating within the statute. If it is not, it is open to Mr. Denby to take the matter to the appeal commissioners. He has not chosen to do that. I do not quarrel with that as I know that the law delays and is expensive.
The Inland Revenue has properly administered the code. I am sorry that Mr. Denby should have a sense of grievance. His case has been most ably put by my hon. Friend. I hope that, in turn, I have put the problem in perspective and that my hon. Friend will explain to Mr. Denby.

Mr. Hordern: I do not dispute that what was done was within the statute. However, two statutes are involved in the case. The statutes define married and separated persons differently. Mr. Denby falls foul of both. It is clear that the statutes are wrong, not Mr. Denby. The simple position is that Mr. Denby found that he was making a substantial contribution unwittingly, in the potential event of there being a liability for his widow if he had died before her. Under the Revenue rules there should be a deduction from earnings before tax so that there is an allowance for the steep payments from which Mr. Denby has suffered. I hope that, on reflection, my hon. and learned Friend will be able to look at that with more care when he has had more time.

Mr. Rees: I can assure my hon. Friend that I have given deep thought to the problem. I have examined it from every possible angle.
I cannot pretend that all our Revenue provisions are perfect. It would be arrogant to do so. I am reasonably satisfied that the Revenue provisions are broadly based, intelligible and reasonably applied and have commanded a certain amount of acceptance over the years. My hon. Friend has deployed a powerful case for looking again at the regulations which the Department of the Environment oversees. I am not charged with that responsibility.
I regret that I cannot respond more positively to my hon. Friend's invitation. The debate to which I am charged to reply is about income tax and the case of Mr. Denby. I have done my best to deal with the income tax argument. I have trespassed a little further and dealt, perhaps not adequately, with matters for which the Department of the Environ-

ment is responsible. I am sure that the report of the debate will be read by colleagues in that Department and that they will take account of it.
I am here to defend the Inland Revenue. I hope that on reflection my hon. Friend will accept that it has operated not only within the letter but within the spirit of the tax code in this case. I recognise that there may be a legitimate or deeply felt grievance that this is not a matter for the Revenue and that perhaps the regulations governing the retirement provisions of GLC and other council employees could be more liberally drawn. However, that is really material for another debate.

Question put and agreed to.

Adjourned accordingly at sixteen minutes to One o'clock